Tag Archive: Brazil

Dollar Consolidation is Morphing into Correction

2024-07-19

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2024-07-19

Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The failure of computer systems has disrupted airlines, banks, media companies, and the London Stock Exchange, ostensibly stemming from an update from a third-party software update, according to Microsoft. The dollar is trading with a firmer bias. The consolidation, we anticipated, appears to be morphing into a correction. Weaker than expected retail sales...

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Quiet Summer Tuesday with Powell’s Testimony and a Deluge of US Supply on Tap

2024-07-09

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2024-07-09

Overview: In the absence of fresh developments, the dollar is consolidating in narrow ranges today against the G10 currencies and enjoys as slight upward bias against most emerging market currencies but for a few currencies from the Asia Pacific region. With practically an empty US data calendar, Fed Chair Powell's testimony with be the highlight, and a soft headline CPI on Thursday anticipated. The US two-year premium over Germany has fallen from...

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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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Greenback Remains Firm, Still Driest Towel on the Rack

2024-06-11

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2024-06-11

Overview:  The US dollar is firm against all the G10 currencies, except for sterling, which is straddling unchanged levels after labor market report that showed an uptick earnings remain elevated, and the unemployment rate ticked up to a new high since September 2021. The dollar reached a new six-day high against the Japanese yen near JPY157.40. The Chinese yuan (onshore) fell to new lows since last November as the mainland markets re-opened from...

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Riksbank Cuts, Oil Slips, and the Yen Remains Under Pressure

2024-05-08

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2024-05-08

(On business trip over next few days. Commentary to resume Monday.  Thanks for your patience.) Overview: Sweden's Riksbank became the second G10 central bank to cut rates this year. The Swiss National Bank cut its deposit rate in March. A couple other large central banks, including the European Central Bank, and possibly the Bank of Canada, may cut rates next month. The Swedish krona is the weakest of the G10 currencies today, off by about 0.45%,...

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Yen Slips, Yuan Jumps, Dollar is Mostly Softer

2024-05-06

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2024-05-06

Overview: The dollar is mostly a little softer today in thin market conditions, with Tokyo, Seoul, and London closed for holidays. The Japanese yen is the weakest G10 currency, losing about 0.5% and slipping through last Friday's lows. At first, after Fed Chair Powell did not endorse rate hike speculation, the market thought he was dovish. But after the softer than expected jobs data and weakness in the ISM services, the market shifted from...

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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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Dollar Extends Gains Against the Yen but Broadly Firmer Ahead of the FOMC

2024-03-20

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2024-03-20

Overview: The US dollar remains bid ahead of the outcome of today's FOMC meeting. No change in policy is expected, but the forward guidance, partly delivered in the updated projections, is the focus. In the last iteration (December), the Fed "dot" was for three rate cuts this year. Japanese markets were closed for a national holiday today but dollar's gains against the yen have been extended and the greenback is nearing the peak seen in...

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Ueda’s Comments Weigh on Yen as the Market Awaits US CPI

2024-03-12

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2024-03-12

Overview: The US CPI has become one of the most important high-frequency economic reports for the capital markets. The dollar is going into the report narrowly mixed against the G10 currencies. Comments by BOJ Governor Ueda about the weakness in consumption of non-durable goods was seen by some as reducing the likelihood of a change in policy next week.

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Japan’s Q4 23 Contraction Revised Away, Helping Keep Yen Bid

2024-03-11

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2024-03-11

Overview: News that the Japanese economy expanded rather than contracted in Q4 23 has fanned expectations that rates could be as early as next week. This is helping keep the yen supported, though it remains in the pre-weekend range, albeit barely.

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Weak US Durable Goods may Herald Pullback in Capex

2024-02-27

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2024-02-27

Most of the G10 currencies are trading quietly in narrow ranges today. After a slightly firmer than expected national CPI reading, which still moderated, and a pullback in US yields, the Japanese yen is the strongest of the major currencies.

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Dollar Stabilizes After Extending Gains

2023-10-03

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2023-10-03

Overview: The dollar's gains were initially extended before a consolidative tone emerged. The euro has been sold to $1.0460 and has returned to almost $1.05. Sterling fell to nearly $1.2060 and has recovered though has stopped short of $1.2100. The dollar edged closed to JPY150 but stalled near JPY149.95 and has held above JPY149.65. The Australian dollar near $0.6300 and the greenback rose to CAD1.3725. Benchmark 10-year yields are firm, though...

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Looming US Government Shutdown Stems the Dollar’s Surge

2023-09-28

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2023-09-28

Overview: The increasingly likely partial US federal government shutdown has spurred a bout of liquidation of long dollar positions. The psychologically important JPY150 level was approached, and the euro was sold through $1.05 yesterday, and the greenback has come back better offered today. It is lower against all the G10 currencies. It is mixed against the emerging market currency complex, with central European currencies and South African rand...

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Higher for Longer Lifts the Dollar, while SNB Surprises Many by Standing Pat–Over to the BOE

2023-09-21

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2023-09-21

Overview: The Federal Reserve's hawkish hold, which included 50 bp less of cuts next year than it had signaled in June, has lifted the dollar against most currencies today. The notable exception is the Japanese yen. The greenback did extend its advance to new highs for the year before the market turned cautious ahead of the outcome of the Bank of Japan meeting tomorrow. The Swiss franc is the weakest of the G10 currencies after the Swiss National...

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Softer UK CPI Weighs on Sterling and Lifts Gilts, while Yen Slumps to New Low for the Year, Ahead of the FOMC

2023-09-20

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2023-09-20

Overview: Softer than expected UK CPI has drawn attention ahead of the key event of the day, the FOMC meeting. The UK's CPI has spurred a dramatic rally in Gilts and saw sterling initially extend its recent losses, falling to new four-month lows before stabilizing. The swaps market sees less than a 50% chance of a hike by the Bank of England tomorrow. Meanwhile, even though US Treasury Secretary Yellen suggested conditions in which intervention by...

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US Dollar Punches Higher

2023-09-05

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2023-09-05

Overview:  Disappointing data in Asia and Europe has sent the greenback broadly higher. The strong gains posted before the weekend were mostly consolidated yesterday when the US and Canadian markets were on holiday. The rally resumed today. The Antipodeans and Scandis have been hit the hardest (-0.7% to -1.25%) but all the G10 currencies are down. The Swiss franc and yen are off the least (-0.35%-0.45%), and the euro and sterling have taken out...

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Greenback Remains Firm, with Yen and Aussie Falling to New 2023 Lows

2023-08-14

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2023-08-14

Overview: The dollar and US rates remain firm. The greenback rose to new highs for the year against the Japanese yen and Australian dollar before steadying. Outside of the Swedish krona, which is off nearly 0.5%, the G10 currencies are nursing small losses late in the European morning, mostly less than 0.1%. Most emerging market currencies are also lower. The Chinese yuan gapped lower for the second consecutive session and is also approaching this...

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Markets Remain Unsettled, Bonds and Stocks Retreat, Dollar Gains Ahead of BOE

2023-08-03

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2023-08-03

Overview: The global capital markets remain unsettled. The combination of the BOJ adjustment of its monetary policy, Fitch's downgrade of the US to AA+, ahead of a flood of supply, and new measures by China have injected volatility into the summer markets. The US dollar has extended it gains today against the G10 currencies and most emerging market currencies. The yen has recovered a bit after the BOJ stepped in and bought JGBs for the second time...

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Fitch Roils Markets

2023-08-02

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2023-08-02

Overview: Late yesterday, on the eve of the quarterly refunding announcement, Fitch cut the US rating to AA+ from AAA, citing project fiscal deterioration over the next few years and "the erosion of governance". S&P also has the US as an AA+ credit. Ironically, many observers who have been critical of the US monetary and fiscal policies, like former Treasury Secretary Summers and El-Erian, were also critical of Fitch's decision. The...

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