Tag Archive: US

The Dollar is Having One of Its Best Days This Month

2023-11-30

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2023-11-30

Overview: After being bludgeoned, the dollar is having one of its best days of the month. It is rising against all the major currencies. The Dollar Index is up about 0.5%, which is the most since the end of October. The greenback is also firmer against all the emerging market currencies but the Turkish lira and Russian ruble. Some of the demand for the dollar may be a function of month end, but also the disappointing Chinese PMI, revisions that...

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Dollar Recovers After Losses Extended in Asia

2023-11-29

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2023-11-29

Overview: On the back of lower interest rates, the greenback's slide was extended in early Asia Pacific turnover, but it has recovered. As North American trading begins, the dollar is firmer against all the G10 currencies but the New Zealand dollar, which has been aided by the hawkish hold of the central bank, and an immaterial gain in the Swiss franc. Emerging market currencies are mixed. Central European currencies and the Mexican peso are...

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Canadian Dollar Plays A Little Catch-Up, Rises to best Level in Nearly Seven Weeks

2023-11-28

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2023-11-28

Overview: The US dollar is narrowly mixed against the G10 currencies. The Canadian and Australian dollars lead the advancers, while the Scandis are pacing the losers off 0.1%-0.2% in quiet turnover. Most the freely accessible emerging market currencies are sporting softer profiles today, the Chinese yuan is among them. However, most Asia Pacific currencies, are firmer. Benchmark 10-year yields were softer in the Asia Pacific region in mostly a...

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Corrective Forces Help the Dollar Stabilize

2023-11-22

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2023-11-22

Overview: Corrective forces helped the dollar stabilize yesterday and it enjoys a firmer today. The euro has slipped below $1.09, and the dollar has resurfaced above JPY149.00. The FOMC minutes seem dated by the more than 30 bp decline in the US 10-year yield, the 7% rally in the S&P 500 and roughly 3% drop in the Dollar Index. The implied year-end 2024 Fed funds rate has fallen by 10 bp to 4.51% (5.33% currently). The Japanese government...

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Dollar Retreat Extended, but Turn Around Tuesday may have Already Begun

2023-11-20

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2023-11-20

Overview:  Last week's dollar losses have been extended today. The yen is leading the move, encouraged by talk of a buying by a large US real money fund. The Dollar Index is off about 0.35% after sliding 1.8% last week. It is below the 200-day moving average for the first time since late August. As was the case last week, the Canadian dollar is the laggard. Emerging market currencies are also mostly higher. The Chinese yuan's 0.67% rise is the most...

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Yen Leads Charge Against the Dollar Amid Falling Rates

2023-11-17

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2023-11-17

Overview: The Japanese yen is leading the charge against the dollar today. Short covering in the Japanese bond market, the decline in US rates, and some reports of real money saw the dollar tumble to around JPY149.25 to approach the low for the month near JPY149.20. All the G10 currencies are firmer today, as are all but a few emerging market currencies. The Dollar Index finished October near 106.55 and it has been finding support near 104.00 in...

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Dollar Consolidates Amid Rate Volatility

2023-11-16

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2023-11-16

Overview: The dollar is consolidating its recent moves as interest rate swings continue. The US two-year yield has traded in a nearly 28 bp range in the first two sessions this week, and near 4.88% now, it is 18 bp lower since last Friday's close. The 10-year yield is slipping below 4.50%. It reached almost 4.70% on Monday and had fallen to almost 4.40% yesterday. Part of this reflects the shift in overnight rate expectations. The implied yield of...

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US CPI Front and Center, but Can Congress Avert a Government Shutdown?

2023-11-14

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2023-11-14

Overview: The dollar is somewhat better offered today ahead of the October CPI report. The US House of Representatives may hold a vote today on a continuing resolution to avoid a partial government shutdown at the end of the week. Narrow ranges have prevailed. Most emerging market currencies are firmer, though paradoxically, the South Korean won is the weakest, despite a strong equity market rally (~1.2%), encouraged by the first in increase in...

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US Treasury Yields Come Back Softer After Moody’s Cut Outlook, and the Dollar Rises to New Highs Against the Yen

2023-11-13

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2023-11-13

Overview: The dollar is beginning the new week narrowly mixed against the G10 currencies. Sterling seems largely unaffected by the cabinet reshuffle that has seen former Prime Minister Camron return as the foreign minister, replacing Cleverly who replaces Home Secretary Braverman. The dollar rose to new highs for the year against the Japanese yen (~JPY151.85). The market has shown little reaction to the pre-weekend news that Moody's cut the outlook...

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Food Prices Drive China’s CPI Lower while the Greenback is Mostly Firmer in Narrow Ranges

2023-11-09

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2023-11-09

Overview: The dollar is mostly firmer against the G10 currencies and has been confined to tight ranges through the European morning. Outside of the China's deflation and Japan's monthly portfolio flow data that showed Japanese investors bought the most amount of US Treasuries (~$22 bln) in six months in September, the news stream is light. Most emerging market currencies are trading with a softer bias today. The Philippine peso is the strongest...

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The Dollar’s Recovery has been Extended, but it may Give North American Operators a Better Selling Opportunity

2023-11-07

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2023-11-07

Overview: The dollar's sell-off last week was extreme and it recovered yesterday and through the European session today. The Australian dollar has been hit the hardest. It is off more than 1% today after the RBA lifted the cash rate by 25 bp (to 4.35%). Still, the US dollar's gains have stretched intraday momentum indicators, suggesting the upside correction may be nearly over. The greenback's moves appear to have been driven by interest rate...

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The Dollar Remains Mostly Softer but Near-Term Consolidation is Likely

2023-11-06

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2023-11-06

Overview: The US dollar, which was sold last week after the FOMC and soft employment report, remains on the defensive today. The Antipodean currencies and yen are struggling, but the other G10 currencies are firm. The dollar is also lower against most emerging market currencies. Still, given the magnitude of the dollar's pullback, we suspect some consolidation is likely.Asia Pacific equities rallied, helped by the sharp gains in the US before the...

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Barring Upside Surprise on US Jobs, the Greenback Looks Vulnerable

2023-11-03

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2023-11-03

Overview: The US dollar has been confined to narrow ranges today as the market awaits the October employment report. Barring a significant upside surprise, we suspect the dollar is more likely extend this week's losses. The Dollar Index is off about 0.5% this week. Within the narrow ranges, it is sporting a slightly softer profile again nearly all the G10 currencies. It is also lower against most emerging market currencies, but tight ranges...

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Dollar Extends Losses Post-FOMC

2023-11-02

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2023-11-02

Overview: We suspect that if Martians read the FOMC statement, which was nearly identical to the September statement and listened to Chair Powell, they would conclude there was nothing new. Yet, the market habitually hears Powell as dovish and this has weighed on rates and the dollar, while lifting risk appetites. Follow-through selling of the greenback has dragged it lower against all the major currencies, with the Antipodean leading the way, and...

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BOJ and China PMI Disappoint, While EMU Q2 Growth and October Inflation were Softer than Expected

2023-10-31

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2023-10-31

Overview: The Bank of Japan softened its 1.0% cap on the 10-year, while lifting its core CPI forecast this fiscal year and next. This disappointed many who anticipated a bolder move to exit the extraordinary monetary policy. The yen was sold in disappointment and the dollar has returned to the JPY150.75 area. The eurozone contracted by 0.1% in Q3, while October CPI came in below expectations at 2.9%. The greenback is softer against most of the...

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Markets Calm but Trepidation Runs High

2023-10-30

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2023-10-30

Overview: Fears that the Israel-Hamas war was going to widen this past weekend sent gold and oil sharply higher at the end of last week. A reportedly more restrained Israeli entrance into Gaza has seen gold pullback back below $2000 (~-0.6%) and December WTI soften (~-1.7%). The US dollar is mostly softer. Stronger-than-expected Australian retail sales fan the risk of a hike next week and this appears to be helping the Australian dollar lead the...

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Is the Market Putting on Risk Ahead of the Weekend?

2023-10-27

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2023-10-27

Overview: The US dollar is trading with a softer bias. Among the G10- currencies, only the euro and Swiss franc are the laggards and are nearly flat. In shifting expectations, the market sees the Reserve Bank of Australia as the most likely to hike rates again, while the swaps market appears to be bringing forward cuts by the European Central Bank and the Bank of Canada. The Australian dollar is the strongest G10 currency today and this week. After...

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Poor Flash PMI from Japan and Eurozone

2023-10-24

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2023-10-24

Overview: Bonds and stocks are higher today, and the dollar is mixed. A weak PMI reading seemed to weigh on the euro, but the market shrugged the weak Australian PMI off and the Australian dollar is the G10 currencies while the euro is among the weakest. Yesterday, the North American session showed an appetite for foreign currencies and with some of their intraday momentum stretched to the downside, the stage is set for a possible repeat today. The...

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JPY150 Pierced but Market is Not Done

2023-10-23

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2023-10-23

Overview:  News that Israel's ground assault on Gaza is being delayed while hostage negotiations continue saw gold and oil ease, but tensions continue to run high. Gold peaked near $1997 before the weekend and pulled back to about $1964 today before steadying. December WTI peaked in front of $90 a barrel at the end of last week, and fell to about $86.85 today, but has also steadied. The dollar is firmer against the G10 currencies, with the Scandis...

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The Dollar Continues to Press Against JPY150; Risk Off Ahead of the Weekend

2023-10-20

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2023-10-20

Overview: True to the market's penchant, it heard a dovish Fed Chair Powell yesterday. He seemed to suggest that the bar to another hike was high. This helped cap the 10-year yield just in front of 5.00% and allowed foreign currencies to recover against the dollar. The US two-year yield reversed lower after rising above 5.25%. It is now around 5.15%. Still, Powell appeared to cover similar ground as several other officials, including Fed governors...

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