Tag Archive: Currency Movement

On the Edge of the Abyss

2026-04-07

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2026-04-07

The dollar is mostly narrowly mixed against the G10 currencies. Leaving aside the Swedish krona, which has fallen nearly 0.75% on the back of an unexpected soft March CPI, the other G10 currencies are +/- less than 0.2%. Investors remain on edge ahead the US ultimatum deadline, which is in the Asia Pacific session today. … Continue reading...

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Cease-Fire Hopes Blunt US Ultimatum

2026-04-06

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2026-04-06

The US deadline on Tehran for re-opening the Strait of Hormuz has subtly shifted until tomorrow. The holiday-thinned market initially bought dollars and oil and took risk off in response to the continued attacks and the escalation of US rhetoric. However, negotiations, apparently led by Pakistan, Egypt, and Türkiye for a 45-day cease fire, have …

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Risk of Escalation Discourages Risk Taking while US Jobs Report May Extend the Dollar’s Narrow Ranges

2026-04-03

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2026-04-03

The shroud of the Middle East war overhangs the Good Friday holiday. The attack on an Iranian bridge yesterday threatens a response in kind by Tehran, and this will serve to keep risk appetites in check ahead of the weekend. Many centers will be closed on Monday, as well. The main interest today is with …

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Hope Dashed, Risk Appetites Slashed Ahead of Long Holiday Weekend for Many

2026-04-02

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2026-04-02

President Trump’s national address seemed to contain little more than a reading of some of his recent social media posts. The market was eager for some sign of confirmation of its hope that had buoyed the capital markets in the last couple of sessions. It found none. The threat of escalating attacks while reiterating that …

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Hope Boosts Risk Appetites and Drags the Greenback Lower

2026-04-01

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2026-04-01

Hope springs eternal, and the capital markets are trading on hope that the Middle East war ends shortly, even as missiles continue to be fired in the region. President Trump again hinted that the war may be winding down shortly. He will address the nation at 9:00 pm ET today. At a news conference today, …

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Mixed War News Keeps Oil Firm and the Greenback Consolidating

2026-03-31

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2026-03-31

War developments pulled in both directions, leaving investors on edge On the one hand, Iran struck an oil tanker, carrying Kuwait oil, in port in Dubai. On the other hand, reports suggest President Trump told aides he is willing to wind down hostilities and pressure Iran diplomatically to re-open the Strait of Hormuz. May WTI …

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US Dollar’s Advance Continues but Verbal Threats Lift the Yen

2026-03-30

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2026-03-30

The Middle East war rages on. The Houthis have entered the fray and there is risk that it shuts the Bab El-Mandeb Strait. Aluminum and steel facilities have been reportedly attacked. The US continues to amass forces, including troops, ostensibly for a potential landing operation. There seem to be two “logics” playing out. One is …

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The Dollar and Oil are Bid

2026-03-27

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2026-03-27

The dollar and oil remain firm. The market has a had muted reaction to President Trump’s announcement late yesterday that it will extend its pledge not to strike Iran’s energy infrastructure for ten days (April 6). At the same time, reports indicate the US is considering sending more troops to the area. The logic of … Continue reading »

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Hope Wanes, USD Little Changed while Bonds and Stocks Weaken

2026-03-26

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2026-03-26

The US dollar is trading in narrow trading ranges against the G10 currencies today, but the calm in the foreign exchange market belies stress in other parts of the capital markets. Equities and bonds have been sold. The hope that an end to the Middle East conflict has faltered amid the conflicting signals from the …

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Hope Lifts Stocks and Bonds

2026-03-25

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2026-03-25

There continues to be hope in the capital and commodity markets that a US-Israel war on Iran can be brought to a conclusion soon. While news reports indicate that the US had drafted a 15-point peace plan that has been delivered to Iran via Pakistan, other reports indicate that US is sending more people and … Continue reading »

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Yesterday’s Optimism Turns More Guarded

2026-03-24

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2026-03-24

The markets remain on edge. President Trump’s five-day hiatus announced yesterday is looked upon suspiciously. Much of what has been claimed seems to be part of the psych-operations associated with warfare, like initiating the war during negotiations. Many seem to share our sense that the five-day period will allow more US troops to enter the …

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Threat of Massive Escalation of the War Drags Financial Markets Lower, While Lifting the Greenback

2026-03-23

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2026-03-23

After seemingly teasing the market ahead of the weekend that he was considering “winding down” military operations, President Trump issued Iran an ultimatum that threatens to escalate the conflict. He issued a 48-hour ultimatum that appears to expire around 7:45 pm ET today that if the Strait of Hormuz is not open, Iranian power plants …

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USD Comes Back Bid after Yesterday’s Exaggerated Slide

2026-03-20

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2026-03-20

The market seemed to overreact to the central bank meetings this week. The market heard Fed Chair Powell as more hawkish than the FOMC statement and took the dollar sharply higher. Yesterday, it overreacted to the Bank of England and European Central Banks and sold the greenback aggressively. The swaps market is discounting three rate …

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Limited Follow-Through Dollar Today After Yesterday’s Surge

2026-03-19

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2026-03-19

The US dollar rallied strongly during the Federal Reserve’s press conference yesterday as rates jumped in response to what was widely seen as a hawkish hold, especially given Chair Powell’s framing. There has been limited follow-through dollar sales today, but the technical damage inflicted on many pairs has not been reversed. The Bank of Japan, …

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Hope Lifts Risk Appetites Ahead of the Bank of Canada and FOMC Meetings

2026-03-18

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2026-03-18

There are three main talking points today. The first is the war. While it continues to rage, more oil is reportedly moving through the Strait of Hormuz and pipelines that bypass the choke point entirely. President Trump is again holding out the possibility that the war ends shortly. Second, Japanese Prime Minister Takaichi is in …

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RBA Hikes in a 5-4 Decision, Trump-Xi Meeting Postponed, Beijing Tightens Restrictions on Fertilizer

2026-03-17

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2026-03-17

There have been three developments to note. First, President Trump’s trip to China has been postponed by at least a month. The White House linked it to the war efforts, but earlier reports claimed Chinese officials were disappointed with the lack of progress in the preparatory efforts. The US administration also appeared to warn the …

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Precarious Calm in the Capital Markets, with a Softer Greenback

2026-03-16

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2026-03-16

The war continues to dominate, but the dollar is trading lower against the G10 currencies. April WTI is trading in around a $3 range on both sides of $99 a barrel. US and European benchmark 10-year yields are a little softer. If the markets seem calmer, recognize that it is precarious as the fog of … Continue...

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The War Rages On; Equities and Bonds Don’t Like It,

2026-03-13

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2026-03-13

The war and rhetoric around it keep investors on edge, even though WTI and Brent are consolidating now after reaching marginal new four-day highs. The greenback is firm against the G10 currencies. Disappointing UK January GDP has weighed on sterling, whose 0.65% loss leads the majors. The proximity of the JPY160 level may be encouraging …

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The War Escalates and Markets are Unimpressed with IEA Oil Move

2026-03-12

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2026-03-12

The Middle East war is escalating. The market seems unimpressed with the announcement that strategic oil reserves will be released. The announcement is light on details, such as pace and composition. Moreover, the markets’ understanding of the disruption is well beyond oil and includes gas, fertilizer, sulfur, and urea. Adding to the geo-economic morass, late …

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Middle East War Intensifies, IEA Proposes a Coordinated Release of Strategic Reserves, G7 to Consider

2026-03-11

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2026-03-11

The dollar is mixed as the North American session is about to begin. Heightened expectations of a rate hike next week have lifted the Australian dollar to new highs since June 2022. The Japanese yen is the weakest of the G10 currencies as the dollar extended yesterday’s gains to almost JPY158.50, its best level since …

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