Tag Archive: Currency Movement

Market Recognizes US Tariff Threats as Negotiation Tactics and Sees Through New Front in Criticism of Powell

2025-07-14

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2025-07-14

Overview: The market has taken the US threat of 30% tariffs on the EU and Mexico in stride. Both currencies wobbled a little but are little changed as the North American session is about to start. Participants seem to recognize the threat as a tactic meant to increase the pressure to negotiate (i.e., make new …

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US Tariffs Unsettle the Markets while the UK’s May GDP Unexpectedly Contracted

2025-07-11

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2025-07-11

Overview: The US 35% tariff on Canada and President Trump's threat to have a 15%-20% universal tariff rather than 10% provides today's disruption. A tariff letter for the EU is awaited but seeing how the US treated Canada and Brazil (with whom the US has a trade surplus) warns of the risk to Europe. That …

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The Dollar’s Upside Correction Stalls

2025-07-10

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2025-07-10

Overview: The continued release of US tariff announcements shapes the near-term considerations. Of the surprises, the 50% tariff on Brazil (10% on April's "Liberation Day") is among the most egregious. The US has a trade surplus with it and the letter made clear a personal animosity over the treatment of former President Bolsonaro. After having …

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Capital Markets Take US Tariffs and Threats in Stride

2025-07-09

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2025-07-09

Overview: The US tariff saga continues. Yesterday, President Trump announced a 50% tariff copper, sending the red metal screaming higher (13%+), and threatening 200% tariffs on pharma. Other sectoral investigations are expected to wrap up toward the end of the month. There is a vigorous effort to check "transshipments," but it is not clear how …

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US Tariffs Stall the Greenback’s Upside Correction. RBA Surprises with Stand Pat Decision

2025-07-08

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2025-07-08

Overview: The capricious nature of the US tariffs, the tone in which they were announced, while still allowing time (August 1) to negotiate is the main talk. More tariff announcements are expected today. The dollar's upside correction was cut short, and it is weaker against nearly all the world's currencies. The jump in long-end Japanese …

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US Dollar Extends Recovery; Tariffs Loom but now August 1

2025-07-07

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2025-07-07

Overview: After last week's US jobs data and anticipation of a firm CPI reading next week, US interest rates have firmed, and the dollar begins the new week on a firm note. Meanwhile, US tariff letters from the White House may begin being delivered today. Initially, it was signaled that some letter would go out …

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USD is Mostly Firmer Ahead of Jobs Report for which the Market is on Notice for Downside Risks

2025-07-03

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2025-07-03

Overview: The US dollar is firm. The only G10 currency that is stronger today is sterling, which is recovering from yesterday's sharp losses and the UK's drama eased following Prime Minister Starmer's support for Chancellor Reeves. Of note most of the final June PMI readings were revised higher from the initial estimates. The US struck …

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Dollar Bears Taking the Day Off?

2025-07-02

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2025-07-02

Overview: The dollar's latest leg down began with the President Trump's heightened attacks on the Federal Reserve's conduct of US monetary policy on June 23. That move may be over. Perhaps helped by stronger than expected data yesterday and the rise in US rates. US rates have edged up further today, and the greenback is … Continue reading...

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Dollar Drop Gains Momentum and US Rates Extend Decline

2025-07-01

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2025-07-01

Overview: An accelerated run on the US dollar continues. The euro, sterling, Australian and New Zealand dollars have risen to new highs. The greenback has dropped to new lows since 2015 against the Swiss franc. Japan's efforts to protect its rice farmers triggered the ire of President Trump. The "reciprocal tariffs," which could come back …

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The Greenback is Finishing the Month Quietly, while PBOC Fixes the Dollar at New Lows for the Year

2025-06-30

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2025-06-30

Overview: The US dollar is consolidating in mostly narrow ranges against the G10 currencies. It is trading mostly softer against emerging markets currencies. The news stream features further progress of the US budget bill, which dropped the onerous "revenge tax" (Section 899), and there is talk of as many as a dozen trade framework agreements …

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Dollar Stabilizes after Yesterday’s Shellacking but Finds Little Traction

2025-06-27

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2025-06-27

The US dollar has steadied today after yesterday's shellacking that saw it fall to new multiyear lows against the euro and sterling and 10-year lows against the Swiss franc. The news stream is somewhat more supportive today, with trade deals said to be in the works, in addition to the confirmation/clarification of an agreement with China.

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Dollar Pummeled on Risk to Fed’s Independence

2025-06-26

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2025-06-26

The US dollar was weak yesterday, but it has been pummeled today. It is down against the G10 currencies and all but the Russian ruble and Turkish lira among emerging market currencies. The proximate trigger of today's sell-off were news reports that a successor to Fed Chair Powell could be announced in a few months.

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Markets Enjoy A Calm Moment

2025-06-25

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2025-06-25

Overview: After a volatile start to the week, the capital markets are quieter and the ceasefire between Israel and Iran appears to be holding. The Trump administration is challenging reports that claim the barrage of US bombs merely set back the Iranian nuclear project by a few months. No coup de grace was delivered. The … Continue...

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Fragile Cease-Fire Lifts Animal Spirits and Reverses the Greenback’s Gains

2025-06-24

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2025-06-24

It is not clear when the choreography began. US dramatic display, including dropping a dozen bunker-buster bombs on well telegraphed nuclear enrichment sites in Iran, and reports lend credibility to speculation that the enriched uranium had previously been removed.

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After Initial Reaction, Gold and Oil have Given Back Earlier Gains, and the Greenback Extends the Pre-Weekend Gains

2025-06-23

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2025-06-23

The US struck Iran amid subterfuge and misdirection and while damage was inflicted, it is not clear the extent to which is nuclear capability was destroyed. Now, the world waits for Tehran's retaliation. Still, gold is slightly softer and August WTI is slightly firmer.

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Dollar Comes Back Softer ahead of FOMC Outcome

2025-06-18

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2025-06-18

(Commentary resumes with the weekly outlook on June 21) Overview: Yesterday's dollar buying seen in the North American afternoon appears to have exhausted the position-squaring adjustment amid speculation the US might enter more directly the hostilities with Iran and ahead of the outcome of the FOMC meeting. Follow-through buying to has been limited to a couple …

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Dollar Becalmed, Gold Softer, Oil Firmer

2025-06-17

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2025-06-17

The latest phase of the Israel-Iran conflict continues and the impact on the markets remains minimal. Oil prices are elevated, but private insurance seems to be slowing traffic in the Straits of Hormuz more than the direct results of a blockade that Tehran appeared to have threatened.

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Investors Take Israel-Iran Conflict in Stride: Gold, Oil, and the Dollar are Softer

2025-06-16

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2025-06-16

Overview:  After inflicting damage on Iran's proxies (Hamas and Hezbollah), Israel turned to Iran itself following the IAEA's finding that Tehran was in violation of its uranium-enrichment targets. The war continues. The US reportedly helped Israel shoot down missiles aimed at it, but so far Russia, which signed a defense pact with Iran earlier this …

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Israel’s Strike Lifts Dollar but only Modestly, Gold and Oil Rally

2025-06-13

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2025-06-13

Overview: Israel attacked Iranian nuclear enrichment site and apparently targeted scientists and top Revolutionary Guard leadership. Reports suggest that that no increase in radioactivity has been detected. The US quickly indicated that while it was informed of the attack, it did not authorize it. President Trump did warn of a possible strike, but the press …

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Can’t See the Risk-Off by Looking at the Dollar or Gold

2025-06-12

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2025-06-12

Overview: The combination of President Trump's renewed threat to send letters to announce the new bilateral tariff letters and the heightened tensions with Iran have spurred risk-off forces but they have not been expressed, as often is the case, with a stronger dollar and a surge in gold. The greenback is softer against nearly all …

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