Tag Archive: US

Euro’s Recovery to $1.09 Looks Vulnerable while Yen Falls to New Lows for the Week After Strong Pay Raises Confirmed

2024-03-15

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2024-03-15

At the end of last week, the derivatives market was again pricing in nearly four Fed cuts this year, but this week's data have seen expectations re-converge with the Fed's three rate cuts signaled in December, while cutting the odds of June hike to the lowest in the more than four months.

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Ueda’s Comments Weigh on Yen as the Market Awaits US CPI

2024-03-12

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2024-03-12

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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Japan’s Q4 23 Contraction Revised Away, Helping Keep Yen Bid

2024-03-11

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2024-03-11

Overview: News that the Japanese economy expanded rather than contracted in Q4 23 has fanned expectations that rates could be as early as next week. This is helping keep the yen supported, though it remains in the pre-weekend range, albeit barely.

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Forex Becalmed with the Greenback Mostly Firmer in Narrow Ranges

2024-03-05

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2024-03-05

(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

2024-03-04

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2024-03-04

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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Ueda’s Comments Knock the Yen Back, while the Euro Flirts with $1.08

2024-03-01

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2024-03-01

Overview: The US dollar is mixed today. The dollar-bloc currencies and the Scandis are enjoying a slightly firmer tone, while the euro and sterling are edging higher in European turnover.

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Yen Pops on BOJ Comments on Inflation, but the Dollar holds Most of Yesterday’s Gains against the other G10 Currencies

2024-02-29

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2024-02-29

The dollar is mixed as the market awaits the US personal consumption expenditure deflator, which is the measure of inflation the Fed targets. While there is headline risk, we argue that the signal has already been generated by the CPI and PPI releases.

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Dollar Jumps

2024-02-28

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2024-02-28

Overview: A less hawkish Reserve Bank of New Zealand and a slightly softer than expected January CPI from Australia appears to have sparked a broad US dollar rally.

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Weak US Durable Goods may Herald Pullback in Capex

2024-02-27

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2024-02-27

Most of the G10 currencies are trading quietly in narrow ranges today. After a slightly firmer than expected national CPI reading, which still moderated, and a pullback in US yields, the Japanese yen is the strongest of the major currencies.

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Euro Bid in Europe but Unlikely to Sustain Gains Through North America

2024-02-26

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2024-02-26

Overview: The dollar is beginning the new week mixed. The dollar-bloc currencies and Japanese yen are softer while the European currencies enjoy a firmer today. Among emerging market currencies, central European currencies are trading with higher. The Turkish lira is the notable exception. It is the weakest currency today, off about 0.65%. The Chinese yuan is a little softer, but the dollar continues to be capped near CNY7.20. Last week, more often...

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While the Greenback has Tended to be Sold in Asia this Week, it has Recovered in North America

2024-02-23

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2024-02-23

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

2024-02-22

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2024-02-22

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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Dollar Slips but Dip may Offer New Opportunity

2024-02-20

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2024-02-20

Overview: The US dollar is offered today. It is trading softer against all the G10 currencies, with the yen the notable exception, and it is flat. The Antipodean are leading the way, taking out last week's highs, as has the euro. That said, the intraday momentum indicators are stretched as NY dealers return from the long holiday weekend. The Scandis are also trading above last week's highs. The yen, sterling, Canadian dollar, and Swiss franc are...

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Quiet End to a Busy Week

2024-02-16

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2024-02-16

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

2024-02-15

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2024-02-15

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

2024-02-14

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2024-02-14

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

2024-02-13

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2024-02-13

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

2024-02-12

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2024-02-12

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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Yen Tumbles to New Low on BOJ Comments

2024-02-08

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2024-02-08

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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Sterling Moves Back into Previous Trading Range, but will it Hold?

2024-02-07

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2024-02-07

Overview:  The dollar is trading with a slightly heavier bias as some of its recent gains are pared. Sterling has moved back into the $1.26-$1.28 trading range that dominated since the middle of last December until the start of this week. The euro is also trading a little firmer despite another large drop in German industrial output (-1.6%). The Japanese yen, Swiss franc, and Norwegian krone are the notable exceptions with a softer profile....

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