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Tag Archive: Currency Movement

Markets Rattled to Start the New Month Amid Heightened Trade Tensions

2025-06-02

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2025-06-02

Overview: The breakdown in the US-China trade agreement, the doubling of US steel and aluminum tariffs, and Ukraine's daring drone attack have rattled market, sending stock, bonds, and the dollar lower. All the G10 currencies are up by at least 0.35%, with the Scandis leading the way up by more than 1%. Although the Canadian …

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On-Again Off-Again US Tariffs are Back

2025-05-30

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2025-05-30

Overview: The on-again, off-again US tariffs are back on, but the judicial process is not over. On top of that, US Treasury Secretary Bessent acknowledged what many have suspected:  US-Chinese talks have stalled. The dollar, which was offered yesterday, has come back bid today. It is up against nearly all the G10 currencies. The yen …

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US Trade Court Roils Markets: Trump Administration to Appeal

2025-05-29

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2025-05-29

Overview: There is one driver today. The US Court of International Trade ruled against the Trump administration's "Liberation Day" tariffs. The court rules that the 1977 law used to justify the actions did not apply. The ruling also applies to the earlier tariffs on security of the US borders and fentanyl trafficking. The dollar initially …

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Consumer Confidence Dollar Boost Fades

2025-05-28

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2025-05-28

Overview: The US dollar is mostly softer today against the G10 currencies. Ironically, the New Zealand dollar is the strongest following the widely expected quarter-point cut by the central bank. The Canadian dollar is the laggard, the only G10 currency not to have found traction against the greenback. Most emerging market currencies are also enjoying …

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Japan Sparks Turn Around Tuesday’s Dollar Short-Covering

2025-05-27

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2025-05-27

Overview: Speculation that Japan will take measures to stem the rout in the government bond market has helped spur a short-covering bounce in the dollar after finished last week poorly and sold off yesterday. There has been a sharp drop in Japanese long-term bond yields, and although the dollar is higher against all the G10 …

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Dollar Slumps

2025-05-23

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2025-05-23

Overview:  The dollar is finishing the week heavily.  It is off against nearly all of the world's currencies.  The only exceptions are the Turkish lira and Hong Kong dollar.  For the week, among the G10 currencies, only the Australian dollar has not risen at least 1%,  Helped by stronger than expected retail sales, sterling set …

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Japanese Bond Rout Continues, While Disappointing PMI Weighs on the Euro

2025-05-22

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2025-05-22

Overview: Disappointing flash May PMI readings in Europe and the Asia Pacific helped the US dollar stabilize after yesterday's drop. Asian currencies, including the yen, has been unsettled by reports that in bilateral trade discussions with the US, exchange rates have been discussed. This, coupled with extensive unhedged dollar exposure rocked several of the regional …

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Be Prepared for a Challenging Day

2025-05-21

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2025-05-21

Overview: The greenback is under pressure. It is off against nearly all of the world's currencies after falling in North America yesterday. Reports that Israel may be planning a strike against Iranian nuclear facilities has contributed to the broad risk off moods and helped lift July WTI to new highs since early April. While the …

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Tug-of-War Over the Dollar Continues

2025-05-20

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2025-05-20

Overview: US stocks and bonds recovered from yesterday's sell-off in Asia and Europe. The Swiss National Bank President Schlegel expressed the views of many Americans when he said on Monday that "There is currently no alternative" to US Treasuries, "and it's not foreseeable that there will be an alternative."  The 10- and 30-Treasury yields finished …

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Asia and Europe Respond to Moody’s Belated Downgrade of the US

2025-05-19

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2025-05-19

Overview: Moody’s took away the US AAA rating before the weekend. It was the last of the big three rating agencies to do so. We do not think there is fresh information content in its belated decision, but participants in Asia and Europe have reacted by selling the US dollar and US assets. The 30-year … Continue...

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US to Impose Tariffs in 2-3 Weeks as Administration “Lacks Capacity” to Negotiate with Everyone

2025-05-16

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2025-05-16

Overview: While the US dollar is a little softer today against the G10 currencies, it remains mostly within Wednesday's range. The yen is a notable exception. It made a new high for the week despite the contraction in Q1 25 GDP. Most emerging market currencies are firmer. The markets have not reacted to a statement …

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Asia and Europe Did Not Share North America’s Enthusiasm for the Dollar

2025-05-15

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2025-05-15

Overview: There has been little follow-through dollar buying today after its recovery in North America yesterday. The greenback is softer against most of the G10 currencies. The Antipodeans are lagging alongside the Norwegian krone, perhaps weighed down by the sharp drop in oil prices following President Trump's indication and a deal with Iran may be …

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Dollar Unwinds More of Monday’s Surge

2025-05-14

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2025-05-14

Overview: The US dollar is extending yesterday's pullback after Monday's sharp rally. Monday's rally had met or approached several technical targets, but the momentum and news stream, including the downgrading of US recession forecasts, the pushing out of the next Fed rate cut into Q4 seemed to favor further dollar gains. Against many pairs, the …

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Bullish Consolidation for the Dollar

2025-05-13

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2025-05-13

Overview:  The capital markets are continuing to digest the implications of the US-China 90-day cooling off period. There were dramatic moves yesterday, and with a few exceptions, a consolidative tone has emerged today. The domestic US political focus is shifting to the budget, while the May CPI is due today, and it is expected to …

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US-China Strike 90-Day Cooling Off Period: Dollar and Equities Rally, Bonds Slump

2025-05-12

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2025-05-12

Overview:  The US and China struck an agreement that would lower tariffs for a 90-day cooling off period. The US tariff on China falls to 30% from 145%, while China's tariff on the US falls to 10% from 125%. A new forum was established to allow recurring discussions on economics and trade. The dollar spiked …

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China Replaced US Demand. Will the US Replace Chinese Supply? Investors Hopeful of Sino-American De-Escalation

2025-05-09

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2025-05-09

Overview: After recovering impressively yesterday, the US dollar saw some follow-through buying initially but has reversed lower and is paring yesterday's gains against the G10 and most emerging market currencies. East Asian emerging market currencies that had surged have now traded lower for the past three sessions. The main talking point today is tomorrow's trade …

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Trade Deal with the US Fails to Buoy Sterling Ahead of the Bank of England Rate Cut

2025-05-08

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2025-05-08

Overview: A couple days away from the US-China talks, the two are sitting disputing who sought out the talks. Given the egos, the risk is that the talks are downgraded if not canceled. Expectations ought to be low in any event. On the other hand, the first US trade agreement is expected to be announced …

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US-China Trade Talks this Weekend Help Stabilize the Greenback ahead of FOMC

2025-05-07

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2025-05-07

Overview: There are five developments to note. First, the US and China will have initial trade talks this weekend in Switzerland. Second, the PBOC cut its key rate by 10 bp and cut reserve requirements by 0.5%. It also announced several other measures to boost lending/relending. Third, German factory orders were stronger than expected, perhaps …

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PBOC Returns and Helps Stabilize Local FX

2025-05-06

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2025-05-06

Overview: China's mainland markets re-opened after the extended holiday, and the by setting the dollar's reference rate little changed from its last fix helped inject a note of stability into the local Asian currencies. Indeed, most of them pulled back today, including the Taiwan dollar and the Malaysian ringgit. The yuan and yen are firmer. …

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US Dollar Remains Under Pressure, while Asia Pacific Currencies Lead the Charge

2025-05-05

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2025-05-05

Overview: The dollar has begun the new week under pressure, though many financial centers are closed today. The upside pressure on Asia Pacific currencies remains notable. The offshore yuan, the Taiwanese dollar, and Malaysian ringgit, the Japanese yen, and Australian dollar are among the strongest currencies today. The ostensible trigger is speculation of US semiconductor …

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