<ul><li>Typical household will pay no more than £2,500 a year on energy bills</li><li>This will be in effect for two years from 1 October</li><li>The guarantee supercedes Ofgem’s price cap</li><li>Businesses will also be supported on energy costs</li><li>The support scheme for businesses will be for six months initially</li></ul><p style=““ class=“text-align-justify“>There’s no mention of the cost yet but previous reports have suggested that it should be at least £170 billion. In effect, this will make energy bills more affordable for UK households but essentially the cost is being spread out to the future.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>The pair fell to a low of 143.45 earlier after remarks by Japan top currency diplomat Kanda <a target=“_blank“ href=“https://www.forexlive.com/news/japan-top-currency-diplomat-government-boj-is-extremely-worried-about-recent-yen-moves-20220908/“ target=“_blank“>here</a>. But as mentioned then, the warnings are merely still verbal intervention at the end of the day – even if they are a step up from what they used to previously remark on the currency.</p><p style=““ class=“text-align-justify“>USD/JPY has brushed aside that in a push back up to 144.00 now, up 0.2% on the day.</p><p style=““ class=“text-align-justify“>It must be noted that 145.00 remains a tough resistance point to break through and there is talk of knock out options at the figure level. That will make it even harder for buyers to chew through or touch that level to seek a further push higher. But at the same time, if we do see that layer give way, expect a quick shoot towards 147.00 next.</p>

This article was written by Justin Low at forexlive.com.

<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/dollar-stays-in-control-so-far-on-the-day-20220907/“>Dollar stays in control so far on the day</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-barkin-says-has-bias-towards-hiking-rates-more-quickly-rather-than-more-slowly-20220907/“>Fed’s Barkin says has bias towards hiking rates more quickly, rather than more slowly</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boes-bailey-inflation-target-is-very-important-for-the-uk-20220907/“>BOE’s Bailey: Inflation target is very important for the UK</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boes-tenreyro-we-should-be-going-slowly-when-there-is-a-lot-of-uncertainty-20220907/“>BOE’s Tenreyro: We should be going slowly when there is a lot of uncertainty</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eu-says-will-propose-a-cap-on-russian-gas-20220907/“>EU says will propose a cap on Russian gas</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/disappointing-chinese-trade-data-adds-to-concerns-on-global-outlook-20220907/“>Disappointing Chinese trade data adds to concerns on global outlook</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-q2-final-gdp-08-vs-06-qq-second-estimate-20220907/“>Eurozone Q2 final GDP +0.8% vs +0.6% q/q second estimate</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-july-industrial-production-03-vs-05-mm-expected-20220907/“>Germany July industrial production -0.3% vs -0.5% m/m expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-august-halifax-house-prices-04-vs-01-mm-prior-20220907/“>UK August Halifax house prices +0.4% vs -0.1% m/m prior</a></li></ul><p>Markets:</p><ul><li>USD leads, JPY lags on the day</li><li>European equities lower; S&P 500 futures down 0.1%</li><li>US 10-year yields down 0.6 bps to 3.334%</li><li>Gold up 0.1% to$1,702.41</li><li>WTI crude up 0.2% to $87.09</li><li>Bitcoin down 1.3% to $18,730</li></ul><p style=““ class=“text-align-justify“>The dollar is continuing its rampaging run higher as markets are seeing little alternatives to the current state of play. Equities are sluggish amid global economic concerns while bond yields are holding higher with Europe set to pile on debt to deal with the impending energy crisis in the region.</p><p style=““ class=“text-align-justify“>USD/JPY is a whisker away from 145.00, up over 200 pips today in a rather straightforward march to the key pyschological level. The capitulation is fueling the dollar advance, alongside a softer Chinese yuan – which is on approach towards 7.00 on the dollar.</p><p style=““ class=“text-align-justify“>Elsewhere, the euro remains sluggish and is looking to breach below 0.9900 against the greenback while GBP/USD is lurching towards the March 2020 low of 1.1409 – down 0.8% to 1.1425 currently.</p><p style=““ class=“text-align-justify“>Commodity currencies are also struggling with USD/CAD testing 1.3200 again while AUD/USD is down to near key support close to 0.6700 on the day. The Bank of Canada will be in focus for the former later today, so watch out for that.</p><p style=““ class=“text-align-justify“>With there being little else to work with for traders on the week, the dollar looks set to try and scale to new heights in the coming days unless Fed speakers have something to say about that before the FOMC blackout period and US CPI data next week.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>The pair is falling to the lows for the day now, down 0.8% to 1.1425 as sellers set their sights on the March 2020 low at 1.1409 next. A break below that will open up the next downside leg for the pair and the pound’s woes aren’t helped by a surging US dollar in trading this week and today.</p><p style=““ class=“text-align-justify“>BOE policymakers were out speaking in parliament earlier and they didn’t really do much to exude confidence that they may lean towards a more aggressive rate hike next week. Bailey pretty much just tried to brush it all off by saying „don’t take today’s comments as an indication for what we may do next week“. That’s a weak hand to be playing at a time like this.</p><p style=““ class=“text-align-justify“>And when you throw in remarks on an economy heading towards recession and caution from Tenreyro as seen <a target=“_blank“ href=“https://www.forexlive.com/centralbank/boes-tenreyro-we-should-be-going-slowly-when-there-is-a-lot-of-uncertainty-20220907/“ target=“_blank“>here</a>, it is hardly convincing. All else being equal, the path of least resistance for cable looks to be a continued push lower and the technicals may support that even more once the March 2020 low gives way.</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Prior -3.7%</li><li>Market index 258.1 vs 260.1 prior</li><li>Purchase index 197.8 vs 199.1 prior</li><li>Refinancing index 556.4 vs 562.5 prior</li><li>30-year mortgage rate 5.94% vs 5.80%</li></ul><p style=““ class=“text-align-justify“>Another week, another continued slump in mortgage activity as the average rate on the most popular mortgage tenor rises to its highest since mid-June, amid a spike in bond yields as well in the past week. The data here continues to point towards a worsening trend in the housing market so that it is still something to be wary about.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>The call comes as USD/JPY trades at the highs for the day now, up over 170 pips or 1.2% to 144.50 levels on the day. The pair continues to look poised to hit 145.00 this week:</p>

This article was written by Justin Low at forexlive.com.

<ul><li>Will propose mandatory target for reducing electricity use at peak hours</li><li style=““ class=“text-align-justify“>Will propose a cap on revenues of companies producing electricity with low costs</li><li style=““ class=“text-align-justify“>Will propose a solidarity contribution (of profits) for fossil fuel companies</li><li style=““ class=“text-align-justify“>Will propose a cap on Russian gas</li></ul><p style=““ class=“text-align-justify“>There are no additional details beyond this for now but von der Leyen highlighted some numbers in the statement which sees EU common storages of energy supply at 82% and that they have reduced Russian gas as a total of imports to only 9% (from 40% at the beginning of the Russia-Ukraine conflict).</p>

This article was written by Justin Low at forexlive.com.

<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-continues-march-higher-with-key-resistance-still-some-distance-away-20220906/“>USD/JPY continues march higher with key resistance still some distance away</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/rba-raises-cash-rate-by-50-bps-to-235-as-expected-20220906/“>RBA raises cash rate by 50 bps to 2.35%, as expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/rba-plays-it-straight-hints-that-rates-are-now-in-neutral-territory-20220906/“>RBA plays it straight, hints that rates are now in neutral territory</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-pm-truss-reportedly-plans-to-freeze-household-energy-bills-for-18-months-20220906/“>UK PM Truss reportedly plans to freeze household energy bills for 18 months</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/italy-plans-to-cut-gas-consumption-amid-energy-crunch-20220906/“>Italy plans to cut gas consumption amid energy crunch</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-july-industrial-orders-11-vs-05-mm-expected-20220906/“>Germany July industrial orders -1.1% vs -0.5% m/m expected</a></li></ul><p>Markets:</p><ul><li>GBP leads, JPY lags on the day</li><li>European equities higher; S&P 500 futures up 0.6%</li><li>US 10-year yields up 7 bps to 3.26%</li><li>Gold up 0.1% to $1,712.03</li><li>WTI crude down 0.2% to $86.70</li><li>Bitcoin up 0.8% to $19,899</li></ul><p style=““ class=“text-align-justify“>The dollar continues to sit in a comfortable spot as we await the return of Wall Street from the long weekend. Treasury yields are higher and that is underpinning USD/JPY as the pair pushes to fresh highs since 1998, breaching 142.00 currently – up over 1% on the day.</p><p style=““ class=“text-align-justify“>Things are continuing to stay in place for the dollar as <a target=“_blank“ href=“https://www.forexlive.com/news/things-are-all-lining-up-for-the-dollar-towards-the-end-of-the-week-20220819/“ target=“_blank“>the factors that have driven the move since August</a> are still playing out. EUR/USD rose initially to 0.9985 only to fall back to flat levels now around 0.9925 as the euro is still sluggish amid the energy crisis in the region. GBP/USD is hopeful about new UK PM, Liz Truss‘ efforts to tackle soaring energy prices but I would argue that it is but a false dawn for the quid, with cable nudging up to 1.1600 before keeping around 1.1570 on the day – off two-year lows from yesterday.</p><p style=““ class=“text-align-justify“>Meanwhile, China is slowly guiding the yuan to weaken towards 7.00 against the dollar – in which I would expect them to draw a hard line there after having cut the FX reserve ratio yesterday. USD/CNY touched 6.96 today, which is its highest level in two years.</p><p style=““ class=“text-align-justify“>Elsewhere, the antipodeans are struggling with AUD/USD down 0.4% to 0.6765 after the RBA played it straight and hiked the cash rate by 50 bps to 2.35%, as expected. The central bank hinted at rates being at neutral territory but offered no additional hawkishness as they are very much just a passenger now to the Fed’s tightening drive.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>The energy crisis in Europe is one that is unavoidable at this stage and as gas flows from Russia have been heavily disrupted, there are going to be major risks this winter and the next as well. For Italy, they are planning to turn down the heat in households and businesses to help cut around 5.3 billion cubic metres in consumption.</p><p style=““ class=“text-align-justify“>The government plans to drop the heating temperature by 1 degree Celsius in industrial and residential buildings. Meanwhile, Rome itself is in talks to agree on a further reduction in consumption on a voluntary basis.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>The plan here would be to freeze energy bills at the current level for this winter and the next but the catch here is that they are to be paid for by government-backed loans to energy supplieres. So, what’s going to happen next? BBC reports that „those loans would be repaid over the next 10 to 20 years through supplements to customer bills“. To cut short, it is households who will have to pay for them eventually i.e. the cost is just being spread out instead.</p><p style=““ class=“text-align-justify“>Truss‘ scheme is said to possibly cost beween £100 to £130 billion.</p>

This article was written by Justin Low at forexlive.com.