Tag Archive: China
Dollar Mixed as Markets Digest US Political Developments
Overview: News that President Biden will not seek re-election has left investors unsure of the next step, but PredictIt.org still points to a Trump advantage of slightly better than 60-40. It is not clear yet whether Vice-President Harris will be challenged for the nomination. The dollar is mixed against the G10 currencies, with the dollar bloc and Norway weaker. The yen is up around 0.45% to lead the others higher. The Swiss franc, euro and...
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Dollar Consolidates to Start the New Week
Overview: The assassination attempt on former President Trump has injected a new dynamic as his chances of being re-elected appear to have risen. There are a few trades that seem to benefit from a second term: steepening yield curve, weaker Mexican peso, and stronger crypto. The dollar initially strengthened as the market's initially responded, while Tokyo markets were closed for Marine Day. As North American activity is about to begin, the dollar...
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Narrow Ranges for the Dollar Prevail Ahead of Tomorrow’s US CPI
Overview: The dollar is mostly softer today, but largely within the recent ranges, as the market appears to be waiting for tomorrow's US CPI. There are a few exceptions to note. The yen is trading near its recent lows. A less hawkish Reserve Bank of New Zealand has triggered a sell-off of the local dollar. Softer than expected Norwegian inflation has knocked the krone lower. Most emerging market currencies are firmer, with several Asia Pacific...
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Sigh of Relief Lifts French Markets, But…
Overview: The market feels a bit more at ease after the first round of the French elections that extreme policies will be avoided by an effort to deny the National Rally a legislative majority. French stocks have recouped some of their recent losses and the euro reached $1.0775, its best level since June 13. The yen remains soft after the Tankan survey showed little change but an uptick in capex plans. Outside of the yen and Swiss franc, the dollar...
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The Greenback Consolidates while Sustaining Break against the Yen
Overview: The dollar is sporting a softer
profile today against all the G10 currencies but the Swedish krona. The
Riksbank sounded more dovish than previously, signaling the possibility of a
cut in each of the last three meetings of the year. The dollar has sustained its
push above JPY160 against the Japanese yen. Most emerging market currencies are
also firmer, with the notable exception of Türkiye and South Africa. Türkiye is
expected to keep its...
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Greenback Catches a Bid
Overview: The dollar has caught a bid ahead of the US retail sales and industrial production figures. It is higher against all the G10 currencies but the Swiss franc. The SNB meets Thursday. It surprised many by cutting rates in March and the same logic (low inflation, move ahead of the ECB, stronger franc) may apply now. A hawkish hold by the Reserve Bank of Australia has not done much for the Australian dollar, which is little changed on the day....
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Calmer Markets to Start the New Week
Overview: The US dollar is firmer against most G10
currencies to start the new week. The euro is a notable exception. It is only
slightly higher but confined to a narrow range around $1.07. On the other hand,
most emerging market currencies are firmer, but for a few Asia-Pacific
currencies, including those of China, South Korea, and Taiwan. The Mexican peso
is consolidating but it is also lower on the day. The tone is largely...
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Greenback Remains Firm, Still Driest Towel on the Rack
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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Euro Sold After EU Parliament Elections and Macron’s Gambit
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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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.
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The Euro Remains Firm Ahead of the First Time the ECB will Cut Rates Before the Federal Reserve
Overview: The dollar is mostly softer today, ahead
of tomorrow's employment report. The ECB meeting and President Lagarde's press
conference are main events today. There is little doubt that it will cut rates
today and do so ahead of the Federal Reserve for the first time. The ECB's
forward guidance may be the key to the market's reaction. That said, the euro
is in the upper end of its recent range, near $1.09. The Mexican peso, which
was crushed...
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Dollar Recovers from Yesterday’s Slide, but Slumps Against the Yen
Overview: The dollar's losses scored after yesterday's disappointing ISM manufacturing report were extended initially in Asia Pacific turnover earlier today before it recovered. The recovery has stretched the intraday momentum indicators, warning against expected strong follow-through dollar buying in North America, without fresh impetus.
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Election Results Lift India But Weigh on Mexico
The dollar has returned from the weekend with a better bid tone. It is firmer against all the G10 currencies but the yen, Swiss franc, and Swedish krona, which are marginally firmer. The market seems reluctant to extend the euro or Canadian dollar upticks ahead of the central bank meetings this week, though, ironically, sterling's 0.25% decline leads the major currencies. Election news is a key driver today.
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Japan Confirms Intervention, China’s PMI Disappoints, EMU CPI Firms, Ahead of US PCE Deflator
Overview: The dollar is mostly consolidating
yesterday's losses ahead of month-end and the US income and consumption data. The
PCE core deflator may have risen by 0.2%, the least this, year, but the
year-over-year rate is expected to be steady at 2.8%. The dollar is recovering
from a five-day low against the yen recorded yesterday near JPY156.40 and is
near JPY157.30 in the late European morning turnover. The yen's retreat and a
disappointing...
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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...
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Jump in Japanese Bond Yields Fails to Lift the Yen
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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The Dollar Continues To Recover
Overview: The dollar's recovery begun yesterday has
extended into today's activity. The greenback is higher against all the G10
currencies and most emerging market currencies, but the Indian rupee and
Mexican peso. The BOJ did not reduce its bond buying at today's operation and
the market sold the yen on the news. After reaching JPY153.60 yesterday, the
greenback is near JPY156 now. New initiatives to support the beleaguered
property market was not...
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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...
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Powell, PPI, and US Tariff Announcement on China Featured
Overview: The tone in the foreign exchange market
today is mostly consolidative. The two notable exceptions are the yen and yuan.
Despite higher JGBs yields amid speculation that the BOJ will scale back bond
purchases, as it did yesterday, to support the yen, the greenback is at its
best level since the suspected intervention. The next important technical area
is near JPY157.00. The US is set to announce a new set of tariffs on a wide
range of...
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Consolidative Tone to Start the Week
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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