Tag Archive: U.K.
CNY7.20 Gives Way as Strong Greenback Proves Too Much
Overview: The dollar's post-FOMC sell-off has
been completely reversed and the greenback has reached new highs for the week
against most of the G10 currencies. Heightened intervention fears and softer US
yields has helped steady the yen, which near unchanged now, and is the best
performer. The Scandis and Antipodeans are the heaviest, off 0.65%-0.90%. For
the first time since last November, the US dollar has risen above CNY7.20 and
continued to...
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Market Hears a Dovish Fed and Sells the Greenback
Overview: The Federal Reserve triggered a dollar
sell-off yesterday and follow-through selling was seen in Asia before
profit-taking emerged. That created a new dollar selling opportunity in early European
turnover. The FOMC revised up this year's growth forecast, shaved the
unemployment projection, and while maintaining the PCE deflator forecast, and
the median dot remained for three cuts this year. The soft-landing scenario was
underscored and...
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Dollar Extends Gains Against the Yen but Broadly Firmer Ahead of the FOMC
Overview: The US dollar remains bid ahead of the outcome of today's
FOMC meeting. No change in policy is expected, but the forward guidance, partly
delivered in the updated projections, is the focus. In the last iteration
(December), the Fed "dot" was for three rate cuts this year. Japanese
markets were closed for a national holiday today but dollar's gains against the
yen have been extended and the greenback is nearing the peak seen in...
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Greenback Surges after BOJ Hikes and Ends YCC and RBA Delivers a Dovish Hold
The US dollar is surging today against most of the G10 currencies, and although the intraday momentum is stretched ahead of start of the North American session, there may be little incentive to resist before the end of the FOMC meeting tomorrow.
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Consolidation Featured Ahead of Tomorrow’s US Retail Sales and Friday’s Japanese Wage News
Overview: We came into this week expecting the dollar to rise on the back of a recovery in rates. The two-year note has risen from 4.40% after the jobs report to 4.60%. The dollar's rise has
been less impressive.
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Ueda’s Comments Weigh on Yen as the Market Awaits US CPI
Overview: The US CPI has become one of the most important high-frequency economic reports for the capital markets. The dollar is going into the report narrowly mixed against the G10 currencies. Comments by BOJ Governor Ueda about the weakness in consumption of non-durable goods was seen by some as reducing the likelihood of a change in policy next week.
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Forex Becalmed with the Greenback Mostly Firmer in Narrow Ranges
(Business trip will interrupt the commentary over the next few days. Check out the March monthly here. Back with the Week Ahead on March 9. May have some comments on X @marcmakingsense.) Overview: Outside of the Australian and New Zealand
dollars, which are off by 0.20%-0.25%, the other G10 currencies are little
changed and mostly softer in narrow ranges. A firm Tokyo CPI, mostly on base
effects and softer rates helped keep the US dollar below...
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Narrowly Mixed Dollar to Start the Big Week for Europe and North America
Overview: The dollar is narrowly mixed against the G10 currencies to begin the week that features a Bank of Canada and ECB meetings, US jobs data, Federal Reserve Chair Powell's two-day testimony before Congress, and US President Biden's State of the Union address.
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While the Greenback has Tended to be Sold in Asia this Week, it has Recovered in North America
Overview: Amid a light news stream,
the dollar is mostly in narrow ranges against the G10 currencies. Leaving aside
the Norwegian krone, the others in a +/- 0.15% against the dollar today. We
note that the technical tone of the euro and sterling have improved withe the
five-day moving averages crossing above the 20-day moving averages. On the
other hand, the dollar is approaching the year's low set last week near
JPY150.90. Emerging market...
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Risk On, Dollar Sold
Overview: The
post-close rally in US tech stocks after Nvidia's earnings has fueled risk-on
activity today. The Nikkei closed at record highs with a 2.2% rally. China's
CSI rose for the eighth consecutive session as official discourage sales at the
open and close, and short sales in general. Europe's Stoxx 600 is up more than
0.5% to recoup the small losses seen in the last two sessions. US indices are
poised to gap higher at the open. Benchmark...
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Quiet End to a Busy Week
Overview: The US dollar is winding down this week on
a quiet note. Most of the G10 currencies are trading within yesterday's ranges.
On the week, only the Scandis are set to close with gains, though with a little
effort, the Australian dollar could too. The Japanese yen and Swiss franc are
the laggards off 0.65%-0.75% this week. Most emerging market currencies outside of
central Europe are firmer. The South African rand is the strongest this...
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Divergence Highlighted by Back-to-Back Quarterly Contractions in Japan and the UK but Little FX Reaction
Overview: There has been a string of disappointing economic news today. Japan's economy surprisingly contracted in Q4 23 and the Q3 contraction was a little deeper than initially estimates. Australia's jobs growth was weaker than expected and unemployment rose to 4.1%, matching the highest since November 2021.
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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 US Dollar and Rates Rise Further
Overview: The US dollar and interest rates have continued to
rise after the strong employment report before the weekend helped drive home the
Fed's message at last week's FOMC meeting. The greenback has been bid to new
highs for the year against the G10 currencies but the Canadian dollar. The
dollar also rose to a marginal new high for the year against the Chinese yuan. Interest
rates are jumping, and the market has downgraded the chances of a May...
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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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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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BOJ Stands Pat, Exit Draws Closer, while HK Liquidity is Squeezed Easing Pressure on the Yuan
Overview: The dollar remains largely confined
to its recent ranges as the consolidative phase extends. The Bank of Japan
stood pat and revised its forecasts as it is seen drawing closer another
adjustment in policy, with the market still favoring an April timeframe. A
squeeze in the Hong Kong money market and talk of a large package to support
the equity market helped lift the Chinese yuan for the third consecutive
session and lifted Chinese...
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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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