Tag Archive: Australia

USD Pushes above JPY160

2024-06-26

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2024-06-26

Overview: The dollar is firm, and the market is challenging the JPY160 level, which it has traded above in Europe. Japanese officials say that they do not defend a specific level. The market is nervous though and some participants have professed intentions to sell dollars above there. The Australian dollar is the main exception to the greenback's strength today. A strong monthly inflation print boosts the chances of a rate hike. The Aussie, though,...

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Dollar Comes Back Bid

2024-06-13

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2024-06-13

Overview: The dollar fell alongside US rates yesterday after the softer than expected CPI. The move on both rates and the dollar were pared after the FOMC meeting which held rates steady as widely expected, but the median dot now anticipated one cut this year rather than three. The dollar has recovered more ground today and is trading with a slightly firmer bias G10 currencies. However, trading is quiet and mostly narrow ranges have dominated....

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Euro Sold After EU Parliament Elections and Macron’s Gambit

2024-06-10

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2024-06-10

Overview:  With mixed elements, the market took the US jobs data as relatively strong and took the dollar and US rates higher. The EU Parliament election has shaken up European politics, with the Belgium government collapsing and French President Macron calling a snap legislative election for the end of the month. Holidays in China, Hong Kong, Taiwan, and Australia made for thinner Asia Pacific trading, but the euro was sold and has reached to...

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Yen Unwinds Yesterday’s Gains, while the Mexican Peso and Indian Rupee Stabilize

2024-06-05

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2024-06-05

Overview: The foreign exchange market is calmer today than Monday and Tuesday, and the dollar is mixed. The yen, which rallied, yesterday, has given back most of its gains and the wage data gave the market second thoughts about next week's BOJ meeting. The Mexican peso, which has been sold aggressively in the face of the strong election showing of the Morena party and allies, is the strongest currency today, though the greenback is holding above...

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Stocks and Bonds Retreat; Greenback Extends Recovery but Little Changed Ahead of North American Session

2024-05-29

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2024-05-29

Overview: Stocks and bonds are lower today, and the dollar is slightly firmer having extended yesterday's recovery. Most of the G10 currencies are lower, though the Japanese yen has recovered from after falling to its lowest level since May 1. Slightly softer than expected German states' CPI did the euro no favors. It was sold to a three-day low near $1.0830 before stabilizing. Sterling steadied after dipping briefly below $1.2750. Most emerging...

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The Greenback is Mostly Softer

2024-05-28

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2024-05-28

Overview: The dollar initially extended its pre-weekend and yesterday's heavier tone before finding a better bid in the European morning. Still, as North American dealers return to their posts the dollar is still mostly softer against the G10 currencies, but it is little changed to slightly firmer against the Japanese yen. Most emerging market currencies are firmer, but the South African rand is softer ahead of their election, the Mexican peso is...

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After Hawkish FOMC Minutes, the Dollar Comes Back Softer

2024-05-23

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2024-05-23

Overview:  The dollar was aided yesterday by the hawkish FOMC minutes and the backing up of US rates. The greenback has stabilized today and is softer against all the G10 currencies. The stronger eurozone PMI masks divergence between Germany and France but keeps the recovery narrative intact. The dollar's broad gains pressured the yuan, and the PBOC's dollar reference rate was set at its highest since January. Favorable guidance by Nvidia is...

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Jump in Japanese Bond Yields Fails to Lift the Yen

2024-05-20

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2024-05-20

Overview: The foreign exchange market is quiet. Most of the G10 currencies are +/- 0.1% against the dollar. The crash that took the of Iran's president and foreign minister may have helped lift gold to new record highs ($2450), the impact seems more muted, as poor weather rather than foul play, seems to be main narrative. July WTI reached nearly $80, its best level since May 1 but is hovering around unchanged levels (~$79.50). Canadian markets are...

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After Limited Follow-Through Selling, the Dollar has Come Back Bid

2024-05-16

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2024-05-16

Overview: Three of the G10 currencies rose by more than 1% against the US dollar yesterday after the softer inflation and weak retail sales readings. The Dollar Index lost almost 0.65% yesterday, the most this year. Among emerging market currencies, only the Mexican and Chilean pesos rose by at least 1%. After extending its losses against most of the major pairs, the dollar has come back bid. Only the yen and Swiss franc are firmer on the day. The...

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Will USD be Bought on the Fact after Being Sold on Expectations of a Softer CPI?

2024-05-15

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2024-05-15

Overview: The dollar is trading heavily against the G10 currencies and most of the currencies from emerging markets. The market expects softer US CPI (and retail sales) today. Any decline in the year-over-year core rate would put it at its lowest level since April 2021. Still, this has been anticipated, and the market seems vulnerable to "sell the rumor, buy the fact" type of activity. After all, the Fed will see another employment and...

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Consolidative Tone to Start the Week

2024-05-13

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2024-05-13

Overview: The new week has begun off quietly. The dollar is in narrow ranges against the G10 currencies, +/- 0.15% as the North American market prepares to open. The Dollar Index is trading inside the narrow pre-weekend range. With softer US CPI, retail sales, and industrial production due this week, we have a downside bias for the greenback. Most emerging market currencies are firmer. A few Asian currencies, including the Chinese yuan and...

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Dollar is Softer Ahead of the Employment Report

2024-05-03

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2024-05-03

Overview: The greenback is trading with a softer bias ahead of the US jobs report. Solid, even if not spectacular job growth, is expected. However, recent survey data warns of the downside risks. Moreover, counter-intuitively, the dollar has not often rallied this year into the employment data, but frequently has in response. The dollar is softer against the G10 currencies. The Norwegian krone is the strongest, up about 0.6% after the central bank...

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Japan Drives Home Message

2024-05-02

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2024-05-02

Overview: The US dollar is mixed, but the spotlight is on the Japanese yen. It appears that with the market challenging Monday's intervention, Japanese officials entered the market shortly after the US equity market closed yesterday, as the Asia Pacific session got underway and sold dollars again. Initial estimates suggest the intervention amount was two-thirds of Monday's. The timing caught the markets wrongfooted. Tokyo markets are closed Friday...

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Yen Retreats, while Stronger EMU GDP Underscores Nascent Recovery and Lifts the Euro

2024-04-30

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2024-04-30

Overview:  Stronger than expected eurozone GDP strengthened the sense that a nascent recovery may be taking hold and has given the euro a bid in the European morning. The dollar, though, is enjoying a firmer tone against the other G10 currencies today. Australia's unexpected weakness in retail sales has weighed on the Antipodean currencies. The Aussie and Kiwi are off slightly more than 0.5% today. Japanese data were mixed (a recovery in industrial...

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US Employment Data to Set Dollar’s Course

2024-04-05

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2024-04-05

Overview: The focus is squarely on the US employment report. At the risk of oversimplifying, given the position adjustment in the past 48 hours, a solid report can see the greenback recover, while a disappointing report will likely see it deepen the correction of the rally that began with the February jobs report. The dollar recovered in the North American afternoon yesterday and many observers attributed it to the bevy of Fed comments. Yet, the...

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Greenback Losses Extended, but Look for Consolidation in North America

2024-04-04

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2024-04-04

Overview: The softer-than-expected ISM services report caught the market leaning the wrong way. Although interest rates had a muted reaction, the dollar was sold. In fact, the Dollar Index saw its second-biggest loss of the year, falling by about 0.50%. ISM services prices paid increases moderated to their slowest since March 2020. Supplier deliveries improved to their best since 2009, suggesting a supply chain improvement. Still, the Fed funds...

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Rate Adjustment Underpins Greenback

2024-04-03

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2024-04-03

Overview: The adjustment to US interest rates continues and this helps underpin the US dollar. The 10-year yield rose to 4.40% yesterday, the highest it has been since last November. It is trading 4.34%-4.38% today. The two-year yield is firm though holding below the Q1 high set last month near 4.75%. This week, for the first time since last October, the Fed funds futures do not have at least a quarter point cut discounted for July. As recently as...

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Heightened Threat of Japanese Intervention Pushes Greenback Away from JPY152

2024-03-27

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2024-03-27

Overview: The dollar neared JPY152, setting a new 34-year high. This appeared to spur a senior official meeting in Tokyo, ostensibly to talk about the response. Previously, we suggested that Friday, when most markets outside of Asia will be closed, could provide an interesting opportunity for intervention. The implicit threat was enough to take the dollar to JPY151.10 in the European morning. Most of the G10 currencies are softer against the dollar...

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Market Hears a Dovish Fed and Sells the Greenback

2024-03-21

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2024-03-21

Overview:  The Federal Reserve triggered a dollar sell-off yesterday and follow-through selling was seen in Asia before profit-taking emerged. That created a new dollar selling opportunity in early European turnover. The FOMC revised up this year's growth forecast, shaved the unemployment projection, and while maintaining the PCE deflator forecast, and the median dot remained for three cuts this year. The soft-landing scenario was underscored and...

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