Tag Archive: Canada
The Dollar Remains Soft Ahead of the Employment Report
Overview: The dollar is little changed against the major currencies ahead of the US jobs report. It has been trading heavier than we expected given that two more G10 central banks cut interest rates ahead of the Federal Reserve.
Read More »
Read More »
Consolidative Tuesday
Overview: The dollar is consolidating but with a somewhat
heavier bias today. The G10 currencies are firmer but for the New Zealand and
Canadian dollars, which are slightly softer. Most emerging market currencies
are also firmer, except for a handful of Asian currencies. The news steam is
light. Equities are trading off. The MSCI Asia Pacific Index
snapped a seven-day rally, and Hong Kong shares and the mainland shares that
trade there led the...
Read More »
Read More »
Will USD be Bought on the Fact after Being Sold on Expectations of a Softer CPI?
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...
Read More »
Read More »
Riksbank Cuts, Oil Slips, and the Yen Remains Under Pressure
(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%,...
Read More »
Read More »
Market Pushes the Yen Lower, Helped by a Broadly Firmer Greenback
Overview: The dollar is firmer against all the G10
currencies today. The market is somewhat less fearful of intervention and the
yen is extending yesterday's losses. It is rivaling the Australian dollar for
the weakest of the major currencies after the Reserve Bank of Australia left
rates on hold and played down speculation of possibility of a rate hike. Both
currencies are off around 0.4% in late European morning turnover. Disappointing
German...
Read More »
Read More »
Yen Slips, Yuan Jumps, Dollar is Mostly Softer
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...
Read More »
Read More »
Dollar is Softer Ahead of the Employment Report
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...
Read More »
Read More »
Yen Retreats, while Stronger EMU GDP Underscores Nascent Recovery and Lifts the Euro
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...
Read More »
Read More »
US CPI, New Security Initiatives with Tokyo and Manila, Bank of Canada Meeting
Overview: The dollar has been confined to narrow ranges ahead of the US CPI report. Given the backup of US rates and the stronger-than-expected jobs growth, the greenback's performance has been unimpressive.
Read More »
Read More »
Will the Market Push the Dollar Above JPY152 as Japanese Prime Minister Heads to the US?
Overview: The jump in US rates after the employment
report failed to ignite a sustained rally in the dollar and this shaken the
market's near-term confidence. The dollar has been mostly confined to narrow
ranges and the low yielding Swiss franc and Japanese yen are softest with the
G10 complex today. The dollar is knocking on JPY152. The Scandis and Antipodeans lead the advancers. The euro has
made little headway despite a much stronger than...
Read More »
Read More »
US Employment Data to Set Dollar’s Course
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...
Read More »
Read More »
Greenback Losses Extended, but Look for Consolidation in North America
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...
Read More »
Read More »
Rate Adjustment Underpins Greenback
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...
Read More »
Read More »
China PMI is Better than Expected but the Greenback Still Rises above CNY7.23
Overview: The dollar is trading quietly against the G10
currencies as European markets remain on holiday. Narrow ranges have prevailed.
The dollar-bloc currencies are leading with minor gains, perhaps helped on the
margins by better-than-expected Chinese PMI, but the Scandis, which also
typically do well amid a better global growth profile are the laggards. This
may speak to the light liquidity conditions. Japan may have missed a tactical...
Read More »
Read More »
Greenback Surges after BOJ Hikes and Ends YCC and RBA Delivers a Dovish Hold
The US dollar is surging today against most of the G10 currencies, and although the intraday momentum is stretched ahead of start of the North American session, there may be little incentive to resist before the end of the FOMC meeting tomorrow.
Read More »
Read More »
Japan’s Q4 23 Contraction Revised Away, Helping Keep Yen Bid
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.
Read More »
Read More »
Narrowly Mixed Dollar to Start the Big Week for Europe and North America
Overview: The dollar is narrowly mixed against the G10 currencies to begin the week that features a Bank of Canada and ECB meetings, US jobs data, Federal Reserve Chair Powell's two-day testimony before Congress, and US President Biden's State of the Union address.
Read More »
Read More »
Ueda’s Comments Knock the Yen Back, while the Euro Flirts with $1.08
Overview: The US dollar is mixed today. The dollar-bloc currencies and the Scandis are enjoying a slightly firmer tone, while the euro and sterling are edging higher in European turnover.
Read More »
Read More »
Yen Pops on BOJ Comments on Inflation, but the Dollar holds Most of Yesterday’s Gains against the other G10 Currencies
The dollar is mixed as the market awaits the US personal consumption expenditure deflator, which is the measure of inflation the Fed targets. While there is headline risk, we argue that the signal has already been generated by the CPI and PPI releases.
Read More »
Read More »
Dollar Jumps
Overview: A less hawkish Reserve Bank of New Zealand and a slightly softer than expected January CPI from Australia appears to have sparked a broad US dollar rally.
Read More »
Read More »