Tag Archive: Mexico

US-China Exchange Export Restrictions, Yuan is Sold to New Lows for the Year, while the Greenback Extends Waller’s Inspired Losses

2024-12-03

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2024-12-03

Overview: The US dollar has extended the losses scored late yesterday when Federal Reserve Governor Waller indicated he was still leaning toward a December rate cut. The odds of a rate cut rose to around 76% from about 66% at the end of last week. The odds are slightly lower today, around 72%. A solid jobs report on Friday and another uptick in CPI may change some minds. The only G10 currency that is weaker today is the Japanese yen, and it is off...

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French Government on Precipice, Presses Euro Lower

2024-12-02

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2024-12-02

Overview: The US dollar is beginning the new week and month on a firm note. It is rising against all the G10 currencies and nearly all the emerging market currencies. US-President-elect Trump's threat to BRICS if they abandon the dollar is symbolic than substantive, as we have argued, despite the occasional claim to the contrary, a BRICS currency is not realistic, and the China has little interest in fostering another competitor to the yuan. Still,...

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Yen Jumps on Rate Hike Speculation

2024-11-27

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2024-11-27

Overview: The US dollar has a softer profile today. All the G10 currencies are higher, led by 1%+ surge in the yen amid heightened speculation of a rate hike next month, while the US 10-year yield is near 4.25% today, the lowest since the election. Although the Reserve Bank of New Zealand allows for another half-point cut after delivering the second one this year earlier today, the New Zealand dollar has popped up amid sell the rumor buy the fact...

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Euro and Sterling are Trying to Stabilize after Sharp Drop on Back of Disappointing Flash PMI

2024-11-22

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2024-11-22

Overview: Weak preliminary PMI readings in Europe, Japan, and Australia, underscore the apparent divergence with the US, sending the dollar broadly higher. The euro is currently recovering from the sell-off that took it to $1.0335 and sent sterling below $1.25. Only the yen, among the G10 currencies, has weathered today's dollar surge. Most emerging market currencies, especially from central Europe, are weaker. Despite the stronger dollar, gold is...

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Ueda Lifts Yen, Leaving Euro and Sterling Pinned Near Lows

2024-11-21

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2024-11-21

Escalating tensions in Europe and comments from Bank of Japan Ueda that spurred speculation of a December hike are the main drivers of the foreign exchange market today. The yen is the strongest of the G10 currencies, up about 0.65%, while the euro is the weakest, off a little more than 0.25%, and sterling is down almost as much.

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Fragile and Consolidative Tone Starts the Week in FX

2024-11-18

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2024-11-18

Overview: The US dollar has begun the new week consolidating in a mixed fashion against the G10 currencies. Bank of Japan Governor Ueda remains circumspect and did not provide guidance about next month's central bank meeting. Without positive guidance, the market sold the yen, but the swaps market shows about 13 bp of tightening has been discounted, up a couple of basis points from a week ago. Leave aside the New Zealand dollar, which is also under...

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The Dollar’s Surge Continues

2024-11-14

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2024-11-14

Overview: The dollar's surge continues. Most G10 currencies are off 0.45%-0.65%. The US dollar is trading above CAD1.40 for the first time since the pandemic, but the Canadian dollar is faring the best of the G10 today (~-0.15%). Since US election, it is the only major currency not to have fallen by at least 2%. All the emerging market currencies are lower today, as well. The greenback is being underpinned by the continued rise in US rates and...

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Higher Yields Help Extend the Dollar’s Gains

2024-11-12

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2024-11-12

Overview: The dollar continues to ride high. It is up 0.20%-0.50% today against the G10 currencies. Most pairs have extended last week's moves. The Dollar Index, which was near 100 in late September is approaching 106.00. Emerging market currencies are all weaker, as well. The dollar is being helped by higher US yields. After yesterday's holiday, the US 10-year yield is up five basis points to near 4.36%. The two-year yield also is five basis...

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The Dollar Remains Bid, While the Euro and Swiss Franc are Sold Through Last Week’s Lows

2024-11-11

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2024-11-11

Overview: The dollar is bid to start the new week. It has taken out last week's high against the Swiss franc, and the euro has been sold through last week's lows. The divided opposition allowed Ishiba to continue as Japan's prime minister, heading up a minority government. The German government collapsed last week. Chancellor Scholz wanted to hold off holding (and losing) a vote of confidence until January, setting the stage for elections, but it...

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US Dollar Soars and US Rates Jump

2024-11-06

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2024-11-06

Overview: Shortly after the North American markets closed, before any results were known, the market jumped back into the "Trump trade," which it had pared on Tuesday. The dollar and US interest rates soared. The euro is the hardest hit among the G10 currencies today, off about 1.6% and the Canadian dollar, the best performer … Continue...

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Nervous Calm Hangs over the Markets

2024-11-05

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2024-11-05

Overview: A nervous calm hangs over the markets as the US goes to the polls. The proximity of the presidential contest warns that the results may not been known as soon as people hope. Indeed, many fear the voting simply begins the next phase of the contest, with premature declarations of victory and disputes over votes. The dollar is in mostly narrow ranges today, but the Antipodeans and Scandis are the strongest, and the Reserve Bank of Australia...

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US Job Report may Offer Little Relief ahead of Next Week’s US Election and Meetings by Half of the G10 Central Banks

2024-11-01

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2024-11-01

Overview: The first of what promises to be two tumultuous weeks is winding down. The US jobs data is the last big event. It is widely recognized that it will be skewed to the downside because of hurricanes and some mostly temporary factors. Anticipating the market’s reaction is also complicated by the weekend, and reports that Iran may strike back at Israel (through bases in Iraq?), and next Tuesday's US election, and five G10 central bank meetings...

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Eurozone Growth Surprises, Lifts Euro, while UK Budget is Awaited

2024-10-30

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2024-10-30

Overview:  The US 10-year yield is off around a dozen basis points off yesterday's high and European growth in Q3 was better than expected. This appears to have encouraged some dollar liquidation today. The greenback is softer against the G10 currencies, but the Canadian dollar and sterling. The much-awaited UK Autumn budget will be announced shortly. Sterling is consolidating around $1.30. Most emerging market currencies also are enjoying a firmer...

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Consolidative Tone in FX Ahead of Key Events and Data

2024-10-29

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2024-10-29

Overview: A consolidative tone is emerging in the foreign exchange market as the week's key events begin tomorrow:  UK budget, eurozone and US Q3 GDP, and the US ADP private sector jobs estimate, and quarterly refunding. Outside of the Norwegian krone, which is up nearly 0.5%, the other G10 currencies are largely +/- 0.1%. The yen, Swiss franc, and antipodeans are trading with a slightly heavier bias. Among emerging market currencies, most from the...

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Japan’s LDP Loses Majority, Sending Yen Lower, and Oil Gaps Lower on Middle East Developments

2024-10-28

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2024-10-28

Overview: The next couple of weeks in the capital markets are likely to be tumultuous, and the loss of the LDP majority in Japan get it started. The yen gapped lower amid the immediate uncertainty. The yen is off about 0.5% toward the middle of today's range. Leaving aside the Scandis, where are mixed, the other G10 currencies are little changed, +/- 0.15%. The euro has recovered above $1.08, where options for 2.3 bln euros expire tomorrow....

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Greenback Consolidates

2024-10-22

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2024-10-22

Overview:  US interest rates remain firm and the dollar is mostly consolidating against the G10 currencies, in a muted "Turn Around Tuesday." The greenback is straddling the JPY151 area, its best level since the end of July. Despite bearish price action yesterday, the euro, sterling, and Australian dollar have seen limited follow-through selling and modest …

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CSI 300 Drops 7%, Oil Steadies, and the US Dollar Remains Firm

2024-10-09

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2024-10-09

Overview: We suspect the market overreacted to the US jobs data, which was tainted by the lowest "establishment" response in over two decades and seasonal adjustments were likely thrown off by Hurricane Helene and the 33k strike at Boeing. We think Fed officials, and more speak today, have confirmed that it was not the game changer than many market participants think, which was likely influenced by positioning. It did help facilitate the...

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US Rates Extend Gains to Fray 4 percent

2024-10-07

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2024-10-07

The stronger than expected US jobs report triggered a 20 bp jump in the US two-year yield and sent the greenback broadly higher. The market slashed the probability that the Fed would cut by 75 bp in Q4.

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Powell’s Lack of Urgency Helps the Dollar Correct Higher

2024-10-01

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2024-10-01

Overview:   Japan will go to polls a little ahead of the US. And the US election still looks too close to call. Canada may be forced into snap elections if the Bloc Quebecois abandon's negotiating with the minority Liberal government as it has threatened to do at the end of the month. The UK's new Labour government is putting together its first budget to be delivered at the end of the month. Among the first tasks of the new French prime minister is...

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Yen Surges After New LDP Leader Picked, while the Greenback Consolidates

2024-09-27

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2024-09-27

Overview:  Japan's LDP leadership selection has not been the dragged-out affair that many thought likely with a record nine candidate vying for the post. It turns out that the economy may have been less important than foreign affairs and the threat posed by China. Shigeru Ishiba is strong nationalist, who reports indicate own shares in Nippon Steel, whose bid for US steel has faced domestic opposition in the US on seemingly nationalist, rather than...

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