Tag Archive: Japan
Japanese Officials Weigh-In and Help Yen Stabilize, while Euro and Sterling Extend Losses
Overview: The market's reaction to the firmer than expected
January CPI seems exaggerated. We do not think it was the game-changer for the
Federal Reserve that the market seemed to think. The dollar was driven higher,
and it is stabilizing today, though the euro and sterling extended their
losses, most of the other G10 currencies did not. After the yen's six-week
slide did not elicit a response from Japanese officials, yesterday's drop did,
and...
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Sterling Buoyed by Labor Market Report Ahead of US CPI
Overview: The US dollar is enjoying a mostly firmer bias ahead
of today's CPI report. Sterling is the strongest among the G10 currencies after
a more resilient than expected labor market report. The dollar extended its
gains against the Japanese yen to a new high since last November, but the
market seems cautious as it approaches JPY150, where large options expire today.
On the other hand, emerging market currencies are mostly faring better. The...
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The Greenback is in Narrow Ranges to Start the Week
Overview: The foreign exchange market is quiet. The
Lunar New Year holiday shut most Asian markets. That, coupled with the light
news in Europe, have served to keep the dollar in narrow ranges against the G10
currencies. The Swedish krona, Norwegian krone, and Japanese yen are posting
minor gains against the greenback. The New Zealand dollar, which was strongest
major currency last week (1.4%) is off by almost 0.5% today, making it the
weakest...
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Becalmed FX Market doesn’t Conceal the Greenback’s Strength
Overview: The foreign exchange market is
becalmed today, with most of the major pairs trading in narrow ranges. The
economic calendar is light and the North American session features benchmark
revisions in US CPI and Canada's January employment figures. The US quarterly
refunding supply has been absorbed without much fanfare. The dollar-bloc
currencies and the Norwegian krone are firmer today. A bank forecast that the
central bank will hike rates...
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Yen Tumbles to New Low on BOJ Comments
Overview: The dollar is narrowly mixed against most
of the G10 currencies as it continues to consolidate its recent gains. The yen is the notable exception, and
it was sold today, not in response to developments in the US Treasury market, a
frequent driver, but in response to comments by a deputy governor of the central bank,
suggesting a rate adjustment would not necessarily signal the start of a
tightening cycle, which some economists expected....
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Greenback Consolidates Two-Day Surge
Overview: The US dollar is consolidating its the
two-day surge since the jobs data at the end of last week. The Reserve Bank of
Australia did not rule out additional rate hikes, and although the derivatives
markets do not think it is likely, the Australian dollar is the best performer
in the G10 today with a small gain. An unexpectedly strong German factory
orders report failed to help the euro much and it languished near yesterday's
low. Sterling...
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The Euro and Australian Dollar Take Out January Lows to Start the New Month
Overview: Federal Reserve Chair push against
speculation of a March rate cut as explicitly as could be imagined at
yesterday's press conference lifted the dollar, while weighing on stocks. US
regional banks sold off sharply yesterday, and challenges emanating from US
real estate adversely impacted a Japan's Aozora Bank and Deutsche Bank
quadrupled its loss provisions for such exposure. The greenback remains bid. The
euro and Australian dollar have...
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US Tech Sell-Off Challenges Risk Appetites Ahead of the FOMC
Overview: Ahead of the US Treasury's quarterly
refunding announcement and the outcome of the FOMC meeting, the dollar is
trading higher against all the G10 currencies. With US high-flying tech stocks
posting steep losses after disappointing earnings reports, the currencies most
sensitive to risk-appetites, the dollar bloc and the Norwegian krone are the
weakest. Emerging market currencies are mixed. The South African rand,
Philippine peso, and...
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EMU Q4 23 GDP Stagnates, Underscoring Divergence with the US
Overview: The US dollar is mixed ahead of the start
of the FOMC meeting and is mostly in its recent ranges. The euro, which was
sold below $1.08 yesterday for the first time since mid-December is holding
above it today. The less-than-expected projection of US Treasury borrowing
requirements for Q1 and Q2 weighed on US rates, which, in turn, dragged the
greenback lower against the yen. It is trading near a four-day low, a
little above JPY147.00. The...
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Oil Retraces Initial Surge, Euro Slips to Marginal New Low, while Sterling Hugs $1.27
Overview: Key developments today include the Hong
Kong court ordered liquidation of China's Evergrande and the reversal of oil
prices after a sharp rally initially in Asia after separate attack in the
Middle East that killed US troops in Jordan and struck a Russian oil tank in
the Red Sea. March WTI, which settled near $78 ahead of the weekend, its best
level since the end of last November, rallied to about $79.30 before returning
to almost $77.50...
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PBOC Cuts Reserve Requirements, but USD Pullback may offer New Buying Opportunity in North America
Overview: After a strong showing yesterday, the
dollar was sold in Asia and Europe. China announced a cut in reserve
requirements and took more informal action to support the stock market, which
encouraged risk-taking. Yet, the dollar's decline has stretched intraday
momentum indicators, which may provide early operators in North America a new
dollar buying opportunity. The ECB and Norway's central banks meet tomorrow,
and the US reports its first...
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Quiet End to a Busy Week
Overview: The dollar's surge in the first part of
the week has given way to consolidation. The US dollar is sporting a softer
profile against most of the G10 currencies. The Dollar Index is threatening to
snap a three advance. Sterling is a notable exception following the weakest
retail sales report since 2021. Most emerging market currencies, including
China, Taiwan, and Mexico are slightly firmer. US President Biden is expected
to sign a bill...
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Dollar Rally Pauses, but Fuel from Interest Rate Adjustment may not be Complete
Overview: This week's dollar surge is consolidating
today. Interest rates have steadied, but the adjustment, which involves pushing
the first rate from March toward June does not appear complete. This suggests
the dollar's recovery from last November-December's sell-off may not be
complete either. Today, though, it is a little firmer against all the G10
currencies but the Swiss franc. Most emerging market currencies are also
trading with a slightly...
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China Data Dump Keeps Market Looking for a Rate Cut Next Week
Overview: The mostly consolidative week for the US dollar
continues. Most for the G10 currencies are +/- about 0.25% today and only a
slightly wider range for the week. The odds of a Fed rate cut in March is
virtually unchanged on the week at around 75%. The JP Morgan Emerging Market
Currency Index is practically flat on the day and week. The Russian ruble and
Mexican peso lead today's advancers, while eastern and central European
currencies are...
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Don’t be Burned in the Churn
Overview: The broad consolidation in the dollar after the
gyrations at the end of last week continues, and within it the greenback is a
bit softer today. Among the G10 currencies, only the yen is failing to post
gains. Most emerging market currencies, led by central Europe, are also firmer
today. A notable exception is a handful of Asian currencies, include the South
Korean won, Taiwanese dollar, and the Philippine peso. The market's focus is on...
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The Dollar Goes Nowhere Quickly
Overview: The dollar continues to consolidate
broadly after the dramatic price swings at the end of last week. For the most
part, the greenback remains inside yesterday's ranges, which were inside last
Friday's. The G10 currencies are a little heavier today, except the Japanese
yen and Norwegian krone, which are posting small gains. Indeed, the greenback is near session highs against most of the major currencies as we go to print. Emerging market...
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Greenback is Bid ahead of the Jobs Report
Overview: The dollar is bid going into the December
jobs report. After selling off into the end of last year, it has recovered this
week. The five-day moving average is crossing the 20-day moving average against
several of the currency pairs, capturing the shift in momentum. The greenback's
gains have as interest rates have jumped. The 10-year Treasury yield finished
last year near 3.88% and is now near 4.04%. European benchmark rates have
mostly...
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Consolidative Tone Emerges Ahead of Tomorrow’s US Jobs and EMU CPI
Overview: After gaining for the past couple of
sessions to open the New Year, the dollar is mostly softer today. The yen is
the main exception. The greenback was bid above the JPY144 area where
chunky options expire today. Most emerging market currencies are also firmer
though there are a few exceptions in Asia, like the South Korean won and Thai
baht. Still, the general tone is consolidative ahead of tomorrow US jobs data
and the eurozone's CPI....
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Holiday Moves Continue to be Unwound
Overview: The dollar is firm. Rates are mostly
higher and equities lower. The moves scored in the holiday-thin markets are at
end of last year are being unwound. This does not appear complete yet. Geopolitical tensions remain high but do
not seem to be having a direct market influence as both gold and oil are
trading lower. Among the G10 currencies, sterling has been the most resilient
today but nearly flat. Within the emerging market complex, the...
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Firm Start for the Greenback
Overview: The US dollar begins the new year on a
firm note. It is recovering against nearly all the G10 and emerging market
currencies today after depreciating in the holiday-thin markets over the past
couple of weeks. Japanese markets are on holiday until Thursday. The yen and
Swiss franc are the poorest performers among the G10 currencies. Among emerging
market currencies, the Mexican peso, Hungarian forint, and South African rand
are bucking the...
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