Tag Archive: $JPY

FX Daily, August 03: Greenback Remains Firm Ahead of Jobs, JGBs Stabilize, Italian Debt Moves into Spotlight

The US dollar is trading at the upper end of its recent ranges against the euro and sterling. The euro finished below $1.16 yesterday for the first time since the end of June and has not been able to resurface that level so far today.

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FX Daily, August 02: BOJ Surprises, BOE on Tap, Trade Worries Weigh on Stocks

The Bank of England meeting concludes a run of major central bank meetings over the past fortnight. The BOE is widely expected to join the Bank of Canada in raising rates. The Federal Reserve and the ECB were content to do and say nothing new.

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FX Daily, August 01: Trade and Japan Drive Markets Ahead of Stand Pat Fed

Investors recognize the risks to growth posed by the tariffs and counter-tariffs being imposed, but the way the US is going about it is also disconcerting. Within a few hours of signals that the US and China were looking to re-engage in high-level talks, which have not taken place for two months according to reports, the US signaled that the 10% tariff on $200 bln of Chinese goods could now face a 25% tariff instead.

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FX Daily, July 31: BOJ Prepares for QE Infinity

The Japanese yen has been sold following the adjustments to policy and outlook by the BOJ that will allow the unconventional policies continue for an "extended period of time." Cross rate pressure and month-end demand have lifted the euro and sterling through yesterday's highs.

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FX Daily, July 26: Equities like EU-US Trade Truce more than the Euro

The markets generated a collective sigh when Juncker and Trump announced that there would be no new tariffs while new trade negotiations took place.  This was particularly important because Trump reportedly wanted to press ahead with a 25% tariff on car imports.  It was also announced that the EU would buy more soy and liquid natural gas from the US. 

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Great Graphic: US 2-year Premium Grows and Outlook for G3 Central Banks

A cry was heard last week when President Trump expressed displeasure with the Fed's rate hikes. Some, like former Treasury Secretary Lawrence Summers, claimed that this was another step toward becoming a "banana republic." Jeffrey Sachs, another noted economist, claimed that "American democracy is probably one more war away from collapsing into tyranny."

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FX Daily, July 25: Narrow Ranges Prevail

The US dollar is trapped in narrow trading ranges. That itself is news. At the end of last week ago, the US President seemed to have opened another front in his campaign to re-orient US relationships by appearing to talk the dollar down. Contrary to fears, and media headlines of a currency war, the dollar is fairly stable.

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FX Daily, July 24: China Turns To Domestic Stimulus, Weighs on Yuan but Lifts Stocks

Following a record injection via the medium-term lending facility yesterday, China's officials unveiled a set of policies designed to support the weakening economy that soon could face a substantial drag from US tariffs. The effort focuses on boosting domestic demand. Measures include targetted tax cuts and accelerating new infrastructure.

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Euro, Yen, and Equities: Reviewed

US equities and the dollar appear to be moving higher together.  The greenback is near its best level this year against most of the major and emerging market currencies.  The Chinese yuan is not an exception to this generalization.  At the same time, the S&P 500 is at its best levels since the downdraft February, and the NASDAQ set a new record high earlier in the week. 

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FX Daily, July 20: Dollar Consolidates after Trump Wades In

The US dollar is little changed but mostly softer as the week draws to a close. The market is digesting the implications of yesterday's comments by President Trump about interest rates and foreign exchange, and without fresh economic data, are content to go into the weekend. Since Trump's comments yesterday, the euro has not been below $1.1625 nor above $1.1680.

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FX Daily, July 19: Greenback Extends Gains

The US dollar is extending its recent gains against most of the world's currencies.   We continue to see the most compelling case for the macro driver being the diverging policy mixes.  There are also more immediate factors too.  The surprisingly poor UK retail sales report, for example, managed to do what the Brexit chaos and softer than expected CPI fail to do. 

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FX Daily, July 18: Greenback Extends Gains-For Now

After softening in Europe yesterday, the dollar recovered in the North American session with the help of assurances by Fed Chair Powell who reaffirmed the path gradual path despite clear recognition that tariffs threaten wages and growth.  The greenback has extended those gains today and is higher against all the emerging market currencies, expected the Turkish lira, which is slightly firmer.

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FX Daily, July 17: Dollar on Back Foot Ahead of Powell

The US dollar eased in Asia session and the European morning. The greenback had appeared technically vulnerable, and the economic news stream is light. Sterling, unlike most of the other major currencies, remains within yesterday's range. Yesterday's high, a little above $1.3290, maybe reinforced a little today by the GBP245 mln $1.33 option that is expiring. Brexit concerns may also be acting as a drag.

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Great Graphic: Two-year Rate Differentials

Given that some of the retail sales that were expected in June were actually booked in May is unlikely to lead to a large revision of expectations for Q2 US GDP, the first estimate of which is due in 11 days.  Before the data, the Atlanta Fed's GDPNow projects the world's biggest economy expanded at an annualized pace of 3.9% in Q2. 

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FX Daily, July 16: Dollar Softens a Little as Market Awaits Developments

The US dollar is slightly softer against most of the major currencies but is in narrow ranges ahead of today's key events, which include US retail sales and the debate in the UK parliament over Brexit.  The yen is the main exception.  The local markets are closed for a public holiday, and the yen did initially strengthen (the dollar eased to ~JPY112.10) but surrendered those gains and consolidating its biggest loss last week in 10 months.

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Great Graphic: Two Stories for Two Trend Lines

The Dollar Index made a marginal new high for the year at the end of June a touch below 95.55. It fell through the start of this week when it reached nearly 93.70. With the earlier gains, the Dollar Index briefly traded above the 61.8% retracement of the pullback (~94.85). A move now below 94.20 would be disappointing.

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FX Daily, July 13: Trump Trips Sterling, but Greenback Enjoys Broad Gains

President Trump weighed in on Brexit and spurred the largest drop in sterling in more than two weeks.  Trump encouraged Brexit, but he indicated he "would have done it much differently" and that he "actually told Theresa May how to do it, but she did not listen."  Trump cautioned that May's plan would mean it would still be too close to the EU and this would "kill" a free-trade deal with the US.  In effect, Trump backed the harder Brexit camp...

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FX Daily, July 11: Escalating Trade Tensions Set Tone for Capital Markets

The US took the first step in making good its threat to put a 10% tariff on $200 bln of Chinese goods in response to the PRC retaliating for the 25% tariff on $34 bln of its exports. The US provided a list of products that will get the new tariffs after the public comment period is completed at the end of next month. This time the list included numerous consumer goods, like digital cameras, baseball gloves, but have left off popular products, like...

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FX Daily, July 10: May Survives to Fight Another Day, but Sterling’s Recovery Falters

The political obituary of UK's May, who many see as an "accidental" Prime Minister, has been written many times in the past year and a half only to be withdrawn.  Again, it looked like the resignation of two ministers, and a couple of junior ministers was going to spur a leadership challenge. While this still may come to pass, the hard Brexit camp, which has huffed and puffed, simply does not appear to represent a majority of the Tory Party, and...

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FX Daily, July 09: Possibility of a Soft Brexit Excites Sterling (too Early?)

After a little wobble, sterling has responded favorably to the resignation of the UK Brexit team led by David Davis. The idea is that a path to a softer Brexit is good for sterling.  In fairness, it is a bit early to reach this conclusion, and the softer dollar tone puts wind in sterling's sale. There is a GBP244 mln sterling option at $1.3375 that expires today. The June highs were set in the $1.3450-$1.3470 area.  

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