Tag Archive: China

The Euro Remains Firm Ahead of the First Time the ECB will Cut Rates Before the Federal Reserve

2024-06-06

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2024-06-06

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

2024-06-04

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2024-06-04

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

2024-06-03

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2024-06-03

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

2024-05-31

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2024-05-31

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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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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The Dollar Continues To Recover

2024-05-17

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2024-05-17

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?

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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Powell, PPI, and US Tariff Announcement on China Featured

2024-05-14

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2024-05-14

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

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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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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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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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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Dollar Consolidates but Adjustment is Not Over

2024-04-11

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2024-04-11

Overview:  Higher than expected US CPI for the third consecutive month drove US interest rates sharply higher and lifted the greenback broadly. The market appears to be catching its proverbial breath today, but the shallow consolidation suggests the moves are not over.

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US CPI, New Security Initiatives with Tokyo and Manila, Bank of Canada Meeting

2024-04-10

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2024-04-10

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.

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Dollar Consolidates Softer Ahead of Tomorrow’s CPI

2024-04-09

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2024-04-09

Overview: The dollar is trading with a softer bias in mostly narrow ranges against the G10 currencies. It did not rally much ahead of the US jobs data, and it was not able to sustain the upside momentum afterwards, despite the jump in US yields. Former St. Louis Fed President Bullard, who still has a strong reputation in the market, told Bloomberg TV yesterday that three cuts were his base case this year. The Scandis and Antipodeans are the...

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Will the Market Push the Dollar Above JPY152 as Japanese Prime Minister Heads to the US?

2024-04-08

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2024-04-08

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...

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China PMI is Better than Expected but the Greenback Still Rises above CNY7.23

2024-04-01

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2024-04-01

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...

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Waller Pushes on Open Door: Push for Patience Lifts the Dollar, Complicating Japanese Efforts

2024-03-28

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2024-03-28

Overview: Comments by Fed Governor Waller, urging patience on rates and wanting more evidence that price pressures are moderating has helped the greenback extend its recent gains. The yen is the notable exception as the fear of intervention has restrained the dollar bulls. Poor German data, including a sharp 1.9% drop in February retail sales, the fourth consecutive monthly decline, underscored the euro's negative divergence, and the single...

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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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