Tag Archive: China
The US Dollar and Rates Rise Further
Overview: The US dollar and interest rates have continued to
rise after the strong employment report before the weekend helped drive home the
Fed's message at last week's FOMC meeting. The greenback has been bid to new
highs for the year against the G10 currencies but the Canadian dollar. The
dollar also rose to a marginal new high for the year against the Chinese yuan. Interest
rates are jumping, and the market has downgraded the chances of a May...
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The Euro and Australian Dollar Take Out January Lows to Start the New Month
Overview: Federal Reserve Chair push against
speculation of a March rate cut as explicitly as could be imagined at
yesterday's press conference lifted the dollar, while weighing on stocks. US
regional banks sold off sharply yesterday, and challenges emanating from US
real estate adversely impacted a Japan's Aozora Bank and Deutsche Bank
quadrupled its loss provisions for such exposure. The greenback remains bid. The
euro and Australian dollar have...
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US Tech Sell-Off Challenges Risk Appetites Ahead of the FOMC
Overview: Ahead of the US Treasury's quarterly
refunding announcement and the outcome of the FOMC meeting, the dollar is
trading higher against all the G10 currencies. With US high-flying tech stocks
posting steep losses after disappointing earnings reports, the currencies most
sensitive to risk-appetites, the dollar bloc and the Norwegian krone are the
weakest. Emerging market currencies are mixed. The South African rand,
Philippine peso, and...
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Oil Retraces Initial Surge, Euro Slips to Marginal New Low, while Sterling Hugs $1.27
Overview: Key developments today include the Hong
Kong court ordered liquidation of China's Evergrande and the reversal of oil
prices after a sharp rally initially in Asia after separate attack in the
Middle East that killed US troops in Jordan and struck a Russian oil tank in
the Red Sea. March WTI, which settled near $78 ahead of the weekend, its best
level since the end of last November, rallied to about $79.30 before returning
to almost $77.50...
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USD Looks Oversold on Intraday Basis Ahead of a Possible Risk-Off North American Session
Overview: The US dollar is trading lower against most
currencies, but the intraday momentum indicators are stretched, suggesting the
selling pressure may not be sustained through in North America today. December
US personal income and consumption data was contained in yesterday's Q4 23 GDP
data, but the market want to see the monthly print, which is expected to see
the core measure ease with the headline rate flat. Tokyo's January CPI was much...
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PBOC Cuts Reserve Requirements, but USD Pullback may offer New Buying Opportunity in North America
Overview: After a strong showing yesterday, the
dollar was sold in Asia and Europe. China announced a cut in reserve
requirements and took more informal action to support the stock market, which
encouraged risk-taking. Yet, the dollar's decline has stretched intraday
momentum indicators, which may provide early operators in North America a new
dollar buying opportunity. The ECB and Norway's central banks meet tomorrow,
and the US reports its first...
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Stronger-than-Expected UK CPI Helps Steady Sterling after Dollar Rally Extended
Overview: The sharp dollar advance is stabilizing after
follow-through gains earlier today. A larger than expected rise in the UK's
December CPI helped sterling recover from the push below $1.26, the lower end
of a one-month trading range. It is the only G10 currency that is firmer
against the dollar ahead of the North American session. ECB's Lagarde pushed
back against the early rate cut speculation and this may have stemmed the
euro's losses. The...
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Greenback Surges as Rates Back Up
Overview: The US dollar is bid across the board and posting its best session of the month. It is up between about 0.5% (Canadian dollar) to almost 1.0% (Australian dollar) among the G10 currencies. Among the emerging market currencies, only the Russian ruble is holding its own.
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China Data Dump Keeps Market Looking for a Rate Cut Next Week
Overview: The mostly consolidative week for the US dollar
continues. Most for the G10 currencies are +/- about 0.25% today and only a
slightly wider range for the week. The odds of a Fed rate cut in March is
virtually unchanged on the week at around 75%. The JP Morgan Emerging Market
Currency Index is practically flat on the day and week. The Russian ruble and
Mexican peso lead today's advancers, while eastern and central European
currencies are...
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Can the US CPI Break the Dollar out of its Consolidation?
Overview: Stocks and bonds are
trading higher, and the dollar is narrowly mixed ahead of the December US CPI
report. Most of the large bourses in Asia Pacific advanced, led by Japan to new
30-year-plus highs. Hong Kong's Hang Seng snapped seven-day slide to post its
first gain of 2024. Europe's Stoxx 600 is up about 0.33%, to recoup most of its
losses in the past two sessions. US index futures enjoy a modest upside bias.
Benchmark 10-year yields in...
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Consolidation Featured
Overview: After dramatic intraday price swings after
the US jobs data and service ISM figures before the weekend, the dollar is
consolidating today in mostly narrow ranges. The prospect for a March cut by
the Federal Reserve finished last Friday virtually unchanged (73% vs 70%) and
is about 66% chance today. There was interest in Dallas Fed's Logan's
suggestion that the tapering of QT be discussed, though it seems to simply
confirm what many has...
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Greenback is Bid ahead of the Jobs Report
Overview: The dollar is bid going into the December
jobs report. After selling off into the end of last year, it has recovered this
week. The five-day moving average is crossing the 20-day moving average against
several of the currency pairs, capturing the shift in momentum. The greenback's
gains have as interest rates have jumped. The 10-year Treasury yield finished
last year near 3.88% and is now near 4.04%. European benchmark rates have
mostly...
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Consolidative Tone Emerges Ahead of Tomorrow’s US Jobs and EMU CPI
Overview: After gaining for the past couple of
sessions to open the New Year, the dollar is mostly softer today. The yen is
the main exception. The greenback was bid above the JPY144 area where
chunky options expire today. Most emerging market currencies are also firmer
though there are a few exceptions in Asia, like the South Korean won and Thai
baht. Still, the general tone is consolidative ahead of tomorrow US jobs data
and the eurozone's CPI....
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Firm Start for the Greenback
Overview: The US dollar begins the new year on a
firm note. It is recovering against nearly all the G10 and emerging market
currencies today after depreciating in the holiday-thin markets over the past
couple of weeks. Japanese markets are on holiday until Thursday. The yen and
Swiss franc are the poorest performers among the G10 currencies. Among emerging
market currencies, the Mexican peso, Hungarian forint, and South African rand
are bucking the...
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BOJ Speculation Unwound, Taking the Yen Lower
Overview: The busy week of central bank meetings is
off to a mostly slow start. The dollar is narrowly mixed in quiet turnover,
except against the Japanese yen. Many participants seemed to exaggerate the
risks of a BOJ move next week and dollar continued its recovery that began
ahead of the weekend. Among emerging market currencies, central European
currencies appear to be aided by the firmer euro. They are resisting the
dollar's advance seen...
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The Yen Stabilizes in a Broad Range but the Focus is on Today’s US Employment Report
Overview: The US dollar is a little firmer ahead of
the November employment data. It is trading mostly inside yesterday's range. It
is in a wide range against the Japanese yen (~JPY142.50-JPY144.50) even if not
as wide as yesterday (~JPY141.70-JPY147.30). The Canadian and Australian
dollars are the strongest among the G10 currencies, while the South Korean won,
and Taiwanese dollar are the best performers among the emerging market complex.
Gold,...
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Softer Tokyo CPI Buys BOJ Time while Moody’s Cuts the Outlook for China’s Debt following Fiscal Stimulus and the Continued Property Slump
Overview: Outside of the Australian dollar, which
has fallen by around 0.6% following the RBA meeting and the softer final PMI,
which may have dragged the New Zealand dollar a lower by around 0.25%, the
other G10 currencies trading little changed ahead of the start of the North
American session. The eurozone and UK final PMIs were revised higher. Central
European currencies lead the emerging market currencies. China reported better
than expected...
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Rates and the Dollar Come Back Firmer
Overview: Weekend accounts seemed to try to
understand what Fed Chair Powell said by beginning with the large drop in US rates. Yet,
most accounts miss the fact that no matter what Powell has said, the market has more often than not reacted as if he were a dove. Rates have come back firmer today, perhaps as some
recognized the overshoot. The US two-year yield is up nearly seven basis points after
falling 14 before the weekend. The 10-year yield is...
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What Will Powell Say?
Overview: The dollar traded better into month-end but is softer
today. The Scandis and dollar-bloc currencies are leading with around 0.2%-0.5%
gains. In addition to US manufacturing PMI and ISM surveys, and construction
spending, auto sales will trickle in, but key for market participants today
will likely be Fed Chair Powell's comments and the extent that he pushes
against the dramatic rate cuts, with more than a 50% chance of the first cut by...
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The Dollar is Having One of Its Best Days This Month
Overview: After being bludgeoned, the dollar
is having one of its best days of the month. It is rising against all the major
currencies. The Dollar Index is up about 0.5%, which is the most since the end
of October. The greenback is also firmer against all the emerging market currencies
but the Turkish lira and Russian ruble. Some of the demand for the dollar may
be a function of month end, but also the disappointing Chinese PMI, revisions
that...
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