Tag Archive: #USD
Can the US CPI Break the Dollar out of its Consolidation?
Overview: Stocks and bonds are
trading higher, and the dollar is narrowly mixed ahead of the December US CPI
report. Most of the large bourses in Asia Pacific advanced, led by Japan to new
30-year-plus highs. Hong Kong's Hang Seng snapped seven-day slide to post its
first gain of 2024. Europe's Stoxx 600 is up about 0.33%, to recoup most of its
losses in the past two sessions. US index futures enjoy a modest upside bias.
Benchmark 10-year yields in...
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Don’t be Burned in the Churn
Overview: The broad consolidation in the dollar after the
gyrations at the end of last week continues, and within it the greenback is a
bit softer today. Among the G10 currencies, only the yen is failing to post
gains. Most emerging market currencies, led by central Europe, are also firmer
today. A notable exception is a handful of Asian currencies, include the South
Korean won, Taiwanese dollar, and the Philippine peso. The market's focus is on...
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The Dollar Goes Nowhere Quickly
Overview: The dollar continues to consolidate
broadly after the dramatic price swings at the end of last week. For the most
part, the greenback remains inside yesterday's ranges, which were inside last
Friday's. The G10 currencies are a little heavier today, except the Japanese
yen and Norwegian krone, which are posting small gains. Indeed, the greenback is near session highs against most of the major currencies as we go to print. Emerging market...
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Consolidation Featured
Overview: After dramatic intraday price swings after
the US jobs data and service ISM figures before the weekend, the dollar is
consolidating today in mostly narrow ranges. The prospect for a March cut by
the Federal Reserve finished last Friday virtually unchanged (73% vs 70%) and
is about 66% chance today. There was interest in Dallas Fed's Logan's
suggestion that the tapering of QT be discussed, though it seems to simply
confirm what many has...
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Greenback is Bid ahead of the Jobs Report
Overview: The dollar is bid going into the December
jobs report. After selling off into the end of last year, it has recovered this
week. The five-day moving average is crossing the 20-day moving average against
several of the currency pairs, capturing the shift in momentum. The greenback's
gains have as interest rates have jumped. The 10-year Treasury yield finished
last year near 3.88% and is now near 4.04%. European benchmark rates have
mostly...
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Consolidative Tone Emerges Ahead of Tomorrow’s US Jobs and EMU CPI
Overview: After gaining for the past couple of
sessions to open the New Year, the dollar is mostly softer today. The yen is
the main exception. The greenback was bid above the JPY144 area where
chunky options expire today. Most emerging market currencies are also firmer
though there are a few exceptions in Asia, like the South Korean won and Thai
baht. Still, the general tone is consolidative ahead of tomorrow US jobs data
and the eurozone's CPI....
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Holiday Moves Continue to be Unwound
Overview: The dollar is firm. Rates are mostly
higher and equities lower. The moves scored in the holiday-thin markets are at
end of last year are being unwound. This does not appear complete yet. Geopolitical tensions remain high but do
not seem to be having a direct market influence as both gold and oil are
trading lower. Among the G10 currencies, sterling has been the most resilient
today but nearly flat. Within the emerging market complex, the...
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Firm Start for the Greenback
Overview: The US dollar begins the new year on a
firm note. It is recovering against nearly all the G10 and emerging market
currencies today after depreciating in the holiday-thin markets over the past
couple of weeks. Japanese markets are on holiday until Thursday. The yen and
Swiss franc are the poorest performers among the G10 currencies. Among emerging
market currencies, the Mexican peso, Hungarian forint, and South African rand
are bucking the...
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Fed to Express More Confidence that Policy is Sufficiently Restrictive Despite the Easing of Financial Conditions
Commentary will resume with a 2024 outlook on December 29. Overview: The dollar is trading with a firmer bias today ahead of the outcome of the FOMC meeting. Standing pat for two
meetings was framed as a pause, but given the decline in price pressures, being
unchanged for a third meeting is understood as the end of the historically
aggressive tightening cycle. Fed Chair Powell is expected to express greater confidence
that policy is sufficiently...
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Soft US CPI Today Paves Way for Fed Pivot Tomorrow
Overview: The US dollar is trading softer against all the
G10 currencies ahead of what is expected to be a soft November CPI report,
which paves the way for a pivot by the FOMC tomorrow. It is expected to signal
that policy may be sufficiently restrictive and anticipate being able to cut
rates next year more than it thought in September, even if not as much as is
priced into the market. Among emerging market currencies, central European
currencies...
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BOJ Speculation Unwound, Taking the Yen Lower
Overview: The busy week of central bank meetings is
off to a mostly slow start. The dollar is narrowly mixed in quiet turnover,
except against the Japanese yen. Many participants seemed to exaggerate the
risks of a BOJ move next week and dollar continued its recovery that began
ahead of the weekend. Among emerging market currencies, central European
currencies appear to be aided by the firmer euro. They are resisting the
dollar's advance seen...
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The Yen Stabilizes in a Broad Range but the Focus is on Today’s US Employment Report
Overview: The US dollar is a little firmer ahead of
the November employment data. It is trading mostly inside yesterday's range. It
is in a wide range against the Japanese yen (~JPY142.50-JPY144.50) even if not
as wide as yesterday (~JPY141.70-JPY147.30). The Canadian and Australian
dollars are the strongest among the G10 currencies, while the South Korean won,
and Taiwanese dollar are the best performers among the emerging market complex.
Gold,...
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Markets Catch Collective Breath
Overview: The US dollar is mixed today. The dollar-bloc currencies are firmer, while the euro and yen are softer. We had anticipated a recovery of the dollar on ideas that the market has too aggressively pushed down US rates, and pricing in more Fed easing with higher confidence than seems to be warranted by the recent data. However, US rates have not recovered, but the dollar has. Partly, this reflects that rates have fallen as faster if not...
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Softer Tokyo CPI Buys BOJ Time while Moody’s Cuts the Outlook for China’s Debt following Fiscal Stimulus and the Continued Property Slump
Overview: Outside of the Australian dollar, which
has fallen by around 0.6% following the RBA meeting and the softer final PMI,
which may have dragged the New Zealand dollar a lower by around 0.25%, the
other G10 currencies trading little changed ahead of the start of the North
American session. The eurozone and UK final PMIs were revised higher. Central
European currencies lead the emerging market currencies. China reported better
than expected...
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Rates and the Dollar Come Back Firmer
Overview: Weekend accounts seemed to try to
understand what Fed Chair Powell said by beginning with the large drop in US rates. Yet,
most accounts miss the fact that no matter what Powell has said, the market has more often than not reacted as if he were a dove. Rates have come back firmer today, perhaps as some
recognized the overshoot. The US two-year yield is up nearly seven basis points after
falling 14 before the weekend. The 10-year yield is...
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What Will Powell Say?
Overview: The dollar traded better into month-end but is softer
today. The Scandis and dollar-bloc currencies are leading with around 0.2%-0.5%
gains. In addition to US manufacturing PMI and ISM surveys, and construction
spending, auto sales will trickle in, but key for market participants today
will likely be Fed Chair Powell's comments and the extent that he pushes
against the dramatic rate cuts, with more than a 50% chance of the first cut by...
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The Dollar is Having One of Its Best Days This Month
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
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
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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Dollar Starts Softer
Overview: The dollar is beginning the week on
a soft note, despite the modest backing up of yields over the last couple of
sessions and better than expected data, including Black Friday sales and the
preliminary November PMI. It is sporting minor losses against all the G10
currencies, but the Canadian dollar, which is the weakest of the major
currencies this quarter and month. The greenback is also lower against most
emerging market currencies, but...
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