Tag Archive: Currency Movement

Renewed Pressure in Europe Helps Lift the Greenback

2026-10-07

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2026-10-07

Renewed pressure in European bonds has sent the euro back below $1.12, nearly a cent off yesterday’s high.  Its loss of about 0.6% today leads the G10 currency complex lower.  The greenback is also firmer against most emerging market currencies.  French, Italian, and Greek bonds yields are up 11-13 bp.  British, Spanish, and Portuguese 10-year …

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Collective Sigh of Relief as Oil Prices Drop, Yields Fall, and Stocks Rise

2026-10-06

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2026-10-06

The US dollar is mixed today, the general tone in the capital markets is constructive.  Success by the Saudi-back Yemen forces have recapture strategic territory from the Houthis, which has held drive oil prices lower. Bond yields in Europe have tumbled and the wide peripheral premiums over Germany have narrowed.  Equities are higher.  Five Fed officials …

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European Politics Drag the Euro Lower

2026-10-05

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2026-10-05

The US dollar is mostly narrowly mixed today. The political woes in Europe weighed on the euro, which was driven to nearly $1.1160, a 17-month low.  The market does not like the developments in France and the 10-year premium over Germany is nearly 150 bp today.  The two leading parties in next year’s presidential contest …

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US Jobs Report to Help Resolve Tension between Firm Greenback and Softer Short-Term Rates

2026-10-02

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2026-10-02

The US dollar is mostly firmer ahead of today’s important US employment report. The Japan yen and Swiss franc are exceptions and are 0.30%-0.40% higher.  The greenback’s resilience is notable because comments by the vice chair of the FOMC (Williams) and the vice chair of the Federal Reserve Board (Jefferson) both seemed to suggest that …

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New Month, Same Market Dynamics

2026-10-01

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2026-10-01

A new month begins, but the market dynamics are familiar.  Rising oil prices and rising yields have lifted the greenback broadly.  The euro and Canadian dollar have been sold to new lows for the year. Interest rate premiums over Germany within the eurozone widen as the focus is on the French and Italian budgets.  The …

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The Lack of Urgency Expressed by NY Fed President Williams Pushes Rates Lower and Weighs on the Greenback

2026-09-30

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2026-09-30

The combination of lower oil prices yesterday and less hawkish comments by NY Fed President Williams helped steady US interest rates yesterday. Williams, who has a permanent vote on the FOMC as its vice chair, open speaks as part of the Fed’s leadership, and downplayed the sense of urgency. The Fed funds were discounting about …

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The Dollar Remains Firm and the RBA Delivered its Fourth Hike of the Year, though Sounded Less Hawkish

2026-09-29

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2026-09-29

The US dollar continues to trade with a firmer bias.  We are still struck by the over-bought technical momentum indicators, arguably encouraged by the aggressive pricing of the trajectory of Fed policy. In the Fed funds futures, the odds of an October hike six days ahead of the midterm election. In recent years, there is …

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War in Middle East Sends Oil Prices and Yields Higher, Underpins the Dollar

2026-09-28

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2026-09-28

The US has rejected Iran’s latest offer and appears to be moving more force into the region. Oil prices have jumped, which is also serving to push up yields.  The dollar is firmer against most of the G10 currencies. New verbal intervention by Japanese officials, clinging on to the cooperation of the US, to warn …

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Softer US Interest Rates Help the Greenback Steady and Talk of US-Japan Coordination Snaps the Yen’s Five-Day Slide

2026-09-25

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2026-09-25

Oil and US rates are softer today and these developments have helped steady the US dollar after this week’s surge. Even with a firmer tone today, four of the G10 currencies are off more than 1% this week. The yen would have been among them, but comments earlier today from Japan’s Finance Minister Katayama played …

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No Kings but King Dollar

2026-09-24

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2026-09-24

The surge in US rates continues to underpin the greenback. The market anticipates a more aggressive tightening cycle than the Federal Reserve’s recent Summary of Economic Projections suggested. The Atlanta Fed’s GDP tracker points to 5.1% growth this quarter, which would surely surpass China’s. Treasury Secretary Bessent announced a two-month tariff truce extension with China, …

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Greenback is Bid

2026-09-23

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2026-09-23

The US dollar is stronger against all the G10 currencies and most emerging market currencies today. The euro has approached $1.14, despite firmer than expected preliminary September PMI. Japan’s markets re-open tomorrow for the first time this week, and the market has taken the dollar to almost JPY158, around where it peaked before last weekend. …

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Lower Oil Prices Could Help Snap the Nearly Two-Week Rise in the US Two-Year Rate

2026-09-22

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2026-09-22

Ahead of the North American session, the US dollar is mostly a little softer.  It has initially extended its gains in the Asia Pacific session, where Japan is still on holiday, but has retreated in the European morning. Optimism about the amount of oil making its way through the Strait of Hormuz and pipelines has …

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PBOC Lifts Yuan Further While Greenback Consolidates and Oil Tumbles

2026-09-21

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2026-09-21

The US dollar is mostly consolidating in narrow ranges against the G10 currencies. Japanese markets are closed until Thursday, and despite the softer rates the yen is off about 0.20% through the European morning to rival the Canadian dollar as the weakest among the major currencies. The economic diary is light today and tomorrow, ahead …

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Bank of Japan Hikes and Yen Tumbles

2026-09-18

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2026-09-18

The US dollar is narrowly mixed against most of the G10 currencies. The notable exception is the Japanese yen, which is around 1.25% lower today. To be sure, the Bank of Japan lifted its overnight rate, as widely expected, and Governor Ueda seemed to signal a faster pace on policy adjustment. Still, the decision was … Continue...

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US Rates Steady after Yesterday’s Surge and the Greenback Consolidates

2026-09-17

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2026-09-17

The initial reaction to the Federal Reserve rate hike was to take US rates and the dollar higher, even though the hike was well anticipated.  In addition to the dots, which showed 16 officials see another hike as likely being appropriate this year compared with six in June, Chair Warsh’s characterization of the hike as …

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The Greenback Remains Firm but Mostly Inside Yesterday’s Ranges

2026-09-15

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2026-09-15

The rise in oil prices and yields is helping underpin the greenback ahead of tomorrow’s conclusion of the FOMC meeting. The Fed funds futures are discounting almost a 95% chance of a hike, and a second hike is fully priced in before the end of the year. While there was some suggestion by some administration … Continue...

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US Dollar Jumps on Fed Expectations

2026-09-14

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2026-09-14

The combination of heightened expectations for the Federal Reserve to lift rates late this week coupled with the high oil prices have helped lift the US dollar broadly today. Yet, the PBOC set the dollar's reference rate at a new 3 1/2-year low today.  Among the G10 currencies, the Swedish krona has been the hardest …

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US Dollar Bid Ahead of ECB Rate Hike

2026-09-10

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2026-09-10

It seems like a low probability scenario that the US can cap long-term US interest rate when hostilities in the Middle East are disrupting the energy market, while China appears not to be showing the extent of the buying restraint It previously did. Moreover, investment grade corporate issuance is projected to raise a record over …

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Oil Higher, Yen Consolidates, US to Reveal Bond Buyback Plans

2026-09-09

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2026-09-09

There are two main developments today. The first is the escalation of the Middle East war has lifted oil prices. October WTI rose 9.7% last week, and with today’s gains, is a little more than 4% this week. This has helped lift bond yields.  The second is the short squeeze of the Japanese yen. Since …

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Yen Short Squeeze Runs into Middle East War Escalation

2026-09-08

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2026-09-08

The yen’s surge that began in the middle of last week continued today. The greenback fell from above JPY160 to a little below JPY153 today, its lowest level in seven months. There still is no evidence of official intervention. The swaps market continues to price a hike next week and most likely another in December. …

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