Tag Archive: #USD

Bond Rally Continues, Greenback Consolidates with Softer Bias

2023-07-18

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2023-07-18

Overview: The main development in the capital markets is the decline in yields. In Europe, benchmark 10-year yields are off 7-11 bp today, extending the move that began last week. The 10-year Germany Bund yield peaked last Thursday near 2.68% and is near 2.40% now. Similarly, the 10-year Italian yield has fallen from 4.42% to below 4.05% today. The 10-year US Treasury yield fell in five of the last six sessions and is off almost five basis points...

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Euro Edges Higher

2023-07-17

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2023-07-17

Overview:  The US dollar has mostly steadied at the start of the week after last week's sharp losses. The yen, euro, and Swiss franc are enjoying a firmer tone, but only the euro has thus far extended last week's gains, and then, only marginally. Uninspiring data from China pressed the yuan lower, while the firm euro is helping the central European currencies. A typhoon shut Hong Kong markets and Japan's markets were closed for a national holiday....

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After Dramatic Week, Capital Markets are Stabilizing

2023-07-14

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2023-07-14

Overview: After tumbling headlong this week, the dollar appears to be broadly consolidating ahead of the weekend Among the G10 currencies, the Canadian dollar's 1.2% gain is the least and it made new 10-month highs earlier today The beleaguered Scandis soared The Norwegian krone's 6.6% advance followed by the Swedish krona's 5.8% surge led the major currencies The Dollar Index is off about 2.4% this week ahead of the North American session It is...

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Dollar Sell-Off is Getting Stretched

2023-07-13

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2023-07-13

Overview: Softer-than-expected US CPI, following weaker than expected job growth has sent the greenback tumbling. The dollar is stabilizing against the yen today, but the downside momentum is intact against the other major currencies. The euro approached $1.1175, sterling $1.3080, and the greenback slumped to almost CHF0.8615. The Australian dollar reached $0.6850, and the New Zealand dollar tested $0.6360. The Canadian dollar, often a laggard in a...

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US CPI and Bank of Canada Highlight North American Session

2023-07-12

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2023-07-12

Overview: The US dollar's losses have been extended ahead of the June CPI. At the same time, speculation that the Bank of Japan will adjust policy later this month saw the yen extend its gains for the fifth consecutive session. Sterling made new highs since last April, while the Swiss franc has risen to its best levels in about 2 1/2 years. The Dollar Index gapped lower and through the trendline drawn off the April and May lows. The greenback has...

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Powerful Short Squeeze Continues to Lift the Yen

2023-07-11

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2023-07-11

Overview: The greenback remains under pressure. The yen's short squeeze continues, and strong wage growth has helped lift sterling to new highs since last April. Among the G10 currencies, only the Australian and New Zealand dollars are unable to sustain gains through the European morning. Emerging market currencies are also advancing, with a couple of exceptions, including the Turkish lira despite reports on foreign equity inflows. The weaker...

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The Greenback Stabilizes After Pre-Weekend Drop

2023-07-10

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2023-07-10

Overview: The US dollar is mostly firmer after selling off hard before the weekend in response to the jobs data. Ranges are mostly narrow, but the Australian and New Zealand dollars are the heaviest following news of China's deflation. Emerging market currencies are mixed, but of note the liquid, freely accessible currencies, South African rand, Hungarian forint, and Mexican peso are atop the leader board. Despite repeatedly lower US dollar fixes...

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Yen Extends Recovery on Wage Data, Yuan Ticks Up Too

2023-07-07

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2023-07-07

Overview: A powerful short squeeze has lifted the yen by the most in two months this week. The dollar's push today below JPY143 was encouraged by the stronger than expected wage growth. The US jobs report will test its strength. The PBOC fixed the yuan sharply higher today and it is the only emerging market currency that is higher on the day, ahead of the Latam open. The dollar has not drawn much support for the surge in US yields. The 10-year...

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Yen and Yuan Lead Move Against the Dollar

2023-07-06

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2023-07-06

Overview: Stocks and bonds ae selling off today. The greenback is also trading heavily. Ironically, the yen is the strongest among the G10 currencies and the Chinese yuan is the strongest among emerging market currencies. The dollar is firmer against the Scandis and Canadian dollar. Most emerging market currencies, including the Mexican peso, which traded at its best level yesterday since 2015. While nearly all the bourses but India fell in the...

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Sobering PMI Readings Sap Risk Appetites

2023-07-05

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2023-07-05

Overview: As US markets prepare to re-open from yesterday's holiday, the dollar is trading mostly higher, though the euro and yen are steady to slightly firmer. Narrow ranges are prevailing. The Canadian and Australian dollars are exceptions and are off about 0.3%. Emerging market currencies are mostly lower, including Russia, China, South Africa, and Turkey. Final service and composite PMIs were mostly revised lower in Japan, Australia, and the...

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What Happened Today

2023-07-04

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2023-07-04

The US dollar was mostly softer. The New Zealand dollar was the strongest (~0.85%) helped by cross rate gains against the Australian dollar, following the RBA’s decision to stand pat. The Australian dollar fell to one-month lows below NZD1.08. There is scope for another 0.5%, or so to the next target near NZD1.0750. The RBA’s decision to leave its cash target at 4.10% was not surprising, and despite the hawkish rhetoric, the market downgraded the...

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The Greenback Starts H2 on a Firm Note

2023-07-03

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2023-07-03

Overview: The dollar is recovering from the month-end losses seen at the end of last week. Only the New Zealand dollar among the G10 currencies is holding its own. Japanese reports indicate that Tokyo is in contact with the US Treasury about intervention, which is injecting a note of caution as the greenback holds below JPY145.00. Chinese officials also appear to be stepping up their efforts to stabilize the yuan. Among emerging market currencies,...

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Market Continues to Converge With Fed’s Forward Guidance

2023-06-30

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2023-06-30

Overview:  A key development in recent days has been the market's convergence with the Federal Reserve's forward guidance regarding scope for two quarter-point hikes in the second half. The US two-yield is up about six basis points today, extending yesterday's 15 bp increase. It is approaching 5%. The Fed funds futures strip implies one hike has been fully priced in and about a third of the next one. The dollar has risen against all the G10...

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PBOC Fixes Dollar Lower, but It Recovers Against the Yuan, Riksbank Hikes and Market Yawns

2023-06-29

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2023-06-29

Overview: The US dollar is narrowly mixed against the G10 currencies. Stronger than expected Australian retail sales helped steady the currency after the soft inflation data took it down. Sterling has also steadied after it suffered its largest loss yesterday (~0.9%) in over a month. Sweden's 25 bp rate hike has not given the krona much of a lift. Central European currencies lead the emerging market currencies higher, while the PBOC set the...

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The Dollar Regains Composure

2023-06-28

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2023-06-28

Overview: The dollar is better bid today. It is rising against nearly all the G10 currencies, with the Antipodeans bearing the brunt, after a softer than expected Australian inflation report. The yen has steadied after extending its losses to new lows for the year. Emerging market currencies are also mostly lower, though the Mexican peso is edging higher for the fourth consecutive session. The large Asia Pacific bourses rallied with the exception...

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PBOC Sends Signal in Lower Dollar Fix, while the Canadian Dollar makes a 9-Month High

2023-06-27

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2023-06-27

Overview: Hawkish comments by ECB President Lagarde at the central bank symposium in Sintra and the PBOC's weaker dollar fix have weighed on the greenback today. It is lower against most of the G10 currencies, but the Japanese yen and Norwegian krone. It also slipped to a new nine-month low against the Canadian dollar. Emerging market currencies are also mostly firmer, with the notable exceptions of the Russian rouble and beleaguered Turkish lira....

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Calm Start to the Week, with Little Impact from Russia’s Drama

2023-06-26

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2023-06-26

Overview:  The drama in Russia captured the imaginations but failed to have much impact on the capital markets. Conventional wisdom sees it as a sign of Putin's weakness, but he has been underestimated, including by many Ukrainians who did not think Russia was going to invade despite America's repeated warnings. It may take some time for the implications for the two main protagonists, Wagner head Prigozhin and Defense Minister Shoigu. The war in...

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Greenback Jumps on Weak Flash PMIs

2023-06-23

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2023-06-23

Overview: As the market reluctantly edges toward the Fed's guidance, the disappointing PMIs from Europe (but also Japan and Australia) helped boost the greenback. The Dollar Index is trading at seven-day highs above 103 after briefly dipping below 102 to set a new low since mid-May yesterday. The unwinding of cross positions is helping the yen hold its own today as it consolidates near its worst level of the year. The surging dollar and risk-off...

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Higher for Longer

2023-06-22

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2023-06-22

Overview:  The central banks of Norway and Switzerland have hiked rates by 50 bp and 25 bp, respectively. Attention is on the Bank of England. A 25 bp hike is widely expected but after strong inflation report, the risk is clearly for a 50 bp hike. In fact, we suspect a quarter-point move could see sterling sold. With a new orthodox economics team in Turkey, a large rate hike is expected today. Late in the North American session, Mexico's central...

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UK Inflation Surprises to the Upside and Weighs on Sterling

2023-06-21

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2023-06-21

Overview: The UK surprised with higher-than-expected consumer inflation and budget deficit, and the odds of a 50 bp hike tomorrow edged higher. Sterling has been sold on the news and is the weakest of the G10 currencies, off about 0.5%. The dollar is mixed with the euro, Swedish krona, Canadian dollar, and Swiss franc posting small gains. Emerging market currencies are lower, including the Chinese yuan, which is at new lows since last November. The...

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