Tag Archive: Currency Movement

Greenback and Yen Extend Gains

2024-07-24

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2024-07-24

Overview: The dollar's gains have been extended today, but in the risk-off mode, and unwinding of carry positions, the Japanese yen and Swiss franc are firmer.  the dollar has stabilized in late European morning turnover. The Bank of Canada is widely expected to cut rates today and the greenback is pushing against CAD1.38, which it has not traded above for three-months. The US dollar gains, which we anticipated, are coming despite interest rates...

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Short Covering Squeezes the Yen Higher

2024-07-23

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2024-07-23

The US dollar is firmer against all the G10 currencies but the Japanese yen. Local reports and the price action are consistent with short covering of the previously sold yen positions ostensibly ahead of next week's BOJ and FOMC meetings. Still, the greenback is holding above last week's low, slightly below JPY155.40.

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Dollar Mixed as Markets Digest US Political Developments

2024-07-22

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2024-07-22

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 Consolidation is Morphing into Correction

2024-07-19

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2024-07-19

Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The failure of computer systems has disrupted airlines, banks, media companies, and the London Stock Exchange, ostensibly stemming from an update from a third-party software update, according to Microsoft. The dollar is trading with a firmer bias. The consolidation, we anticipated, appears to be morphing into a correction. Weaker than expected retail sales...

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Euro Trades Quietly Ahead of ECB Meeting

2024-07-18

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2024-07-18

Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The US dollar enjoys a firmer bias today, in mostly quiet turnover in narrow ranges. The Australian dollar is a noted exception, and the better than expected jobs growth may have lent it some resilience today. The greenback initially was sold to almost JPY155.35, a new low (since June 7) before recovering to nearly JPY156.60 in Europe. The UK's employment...

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Dollar Crushed, Stocks Slump

2024-07-17

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2024-07-17

Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The dollar is broadly lower, and stocks are under pressure. Comments by a Japanese official, which did not appear to break new ground, coupled with Trump's interview in BusinessWeek, where he was critical that Japan was benefiting from a weak yen, despite having apparently spent some $80 bln this year trying to stop it from falling, may have been the trigger....

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BOJ Appears to have Intervened last Friday Too, but Market Sells Yen Anyway

2024-07-16

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2024-07-16

Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The US dollar is consolidating in narrow ranges against most of the G10 currencies. The Australian and New Zealand dollars, along with the Japanese yen are off by about 0.25%, but the others are +/- 0.10. The latest BOJ data appears to imply that officials intervened not only last Thursday, but Friday as well. Emerging market currencies are mixed but mostly...

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Market Takes JPY Lower Despite Intervention Speculation, While Sterling Shines

2024-07-12

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2024-07-12

Overview: The dollar is mostly consolidating yesterday's CPI-inspired decline. The main features include the market bidding the US dollar back above JPY159 despite more speculation that the BOJ did in fact intervene yesterday and checked on the euro-yen cross in the local session today, and unexpectedly soft Swedish inflation, which the swaps market says could spur three rate cuts here in second half. A record trade surplus and strong aggregate...

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Today’s Battle: Soft US CPI vs Stretched Momentum Indicators and Two Fed Cuts Discounted

2024-07-11

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2024-07-11

Overview: The focus today is on the US CPI report. Another soft reading is expected, and it may strengthen ideas of a Fed cut in September, which ostensibly gives it time to cut again before the end of the year. The dollar is trading with a softer bias against most of the G10 currencies. A stronger than expected May GDP report helped sterling reach new four month high. The greenback is also holding below yesterday's high near JPY161.80 against the...

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Narrow Ranges for the Dollar Prevail Ahead of Tomorrow’s US CPI

2024-07-10

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2024-07-10

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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Quiet Summer Tuesday with Powell’s Testimony and a Deluge of US Supply on Tap

2024-07-09

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2024-07-09

Overview: In the absence of fresh developments, the dollar is consolidating in narrow ranges today against the G10 currencies and enjoys as slight upward bias against most emerging market currencies but for a few currencies from the Asia Pacific region. With practically an empty US data calendar, Fed Chair Powell's testimony with be the highlight, and a soft headline CPI on Thursday anticipated. The US two-year premium over Germany has fallen from...

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Euro is Little Changed, while the Yen is Softer to Start the New Week

2024-07-08

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2024-07-08

Overview: The dollar is narrowly mixed against the G10 and emerging market currencies today. The euro is little changed, holding on to last week's gains, after the surprising French election results, where the focus shifts finding a prime minister that can carry a majority of the new and closely divided National Assembly. Despite firm underlying wage data, the Japanese yen has given back its initial gains, and the dollar is pushing back above...

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No Turn Around Tuesday as Greenback Remains Firm

2024-07-02

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2024-07-02

Taking the next few days off.  Will be back with week ahead commentary on  July 6.  Overview: The sharp jump in US long-term interest rates has helped lift the greenback in recent sessions and it remains firm against most of the G10 currencies today. The Canadian dollar is the best performer, and it is nearly flat. The intraday momentum indicators warn that after a mostly consolidative Asia Pacific and European morning, the greenback may probe...

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Sigh of Relief Lifts French Markets, But…

2024-07-01

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2024-07-01

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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Will the PCE Deflator Really Contain New Information?

2024-06-28

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2024-06-28

Overview: The US dollar is narrowly mixed as North American participants prepare to return for the last session of the first half. Despite firmer than expected Tokyo CPI and stronger than expected industrial output, the market lifted the greenback around JPY161.25 before profit-taking pressures bought it back toward session lows near JPY160.65 in Europe. President Biden is thought to have lost last night's debate with Trump, but it does not appear...

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The Greenback Consolidates while Sustaining Break against the Yen

2024-06-27

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2024-06-27

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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USD Pushes above JPY160

2024-06-26

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2024-06-26

Overview: The dollar is firm, and the market is challenging the JPY160 level, which it has traded above in Europe. Japanese officials say that they do not defend a specific level. The market is nervous though and some participants have professed intentions to sell dollars above there. The Australian dollar is the main exception to the greenback's strength today. A strong monthly inflation print boosts the chances of a rate hike. The Aussie, though,...

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Nervous Calm Hangs over the Markets

2024-06-25

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2024-06-25

Overview:  San Francisco Federal Reserve President Daly spoke aloud what many are thinking. The US labor market may be at an inflection point. The four-week moving average of weekly jobless claims is at the highest since last September and the early call for July nonfarm payrolls is about 185k, which if true, would be a sub-200k reading for the second time in three months. The high-flying Nvidia has fallen 13% in the past three sessions coming into...

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US Dollar Offered, but Intra-Day Momentum Indicators are Stretched

2024-06-24

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2024-06-24

Overview: The Dollar Index reached its best level since May 1 before the weekend but has come back softer against all the G10 currencies and most emerging market currencies. There is no apparent driver, and the intraday day momentum indicators caution against expecting much in the way of follow through gains in North America. The dollar edged closed to JPY160 and triggered official intervention warnings. The market has turned cautious and is...

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Computer Glitch–Brief Commentary

2024-06-21

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2024-06-21

Thanks for your patience. See you tomorrow. Japan:  USD reached nearly JPY159.15, highest since late April.  US Treasury added Japan to fx watchlist after recent intervention. USD up past six consecutive sessions coming into today. Japanese rhetoric about fx escalates.  National CPI headline and core ticked up primarily utilities (electricity and gas). Excluding food and energy, CPI slowed to 2.1% from 2.4%. This was largely in line with the Tokyo...

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