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Tag Archives: Currency Movement

China PMI is Better than Expected but the Greenback Still Rises above CNY7.23

Overview: The dollar is trading quietly against the G10 currencies as European markets remain on holiday. Narrow ranges have prevailed. The dollar-bloc currencies are leading with minor gains, perhaps helped on the margins by better-than-expected Chinese PMI, but the Scandis, which also typically do well amid a better global growth profile are the laggards. This may speak to the light liquidity conditions. Japan may have missed a tactical opportunity to intervene to...

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Waller Pushes on Open Door: Push for Patience Lifts the Dollar, Complicating Japanese Efforts

Overview: Comments by Fed Governor Waller, urging patience on rates and wanting more evidence that price pressures are moderating has helped the greenback extend its recent gains. The yen is the notable exception as the fear of intervention has restrained the dollar bulls. Poor German data, including a sharp 1.9% drop in February retail sales, the fourth consecutive monthly decline, underscored the euro's negative divergence, and the single currency was sold to new...

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Heightened Threat of Japanese Intervention Pushes Greenback Away from JPY152

Overview: The dollar neared JPY152, setting a new 34-year high. This appeared to spur a senior official meeting in Tokyo, ostensibly to talk about the response. Previously, we suggested that Friday, when most markets outside of Asia will be closed, could provide an interesting opportunity for intervention. The implicit threat was enough to take the dollar to JPY151.10 in the European morning. Most of the G10 currencies are softer against the dollar but the yen. A...

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Dollar’s Recent Gains Pared but Firm Undertone Remains Intact

Overview: After surging at the last week, the dollar consolidated yesterday and is continuing to do so today as slightly lower levels. The Swiss franc is the only G10 currency unable to gain traction against the greenback today. Still, the dollar's pullback has barely met the minimum retracement targets of the jump last Thursday and Friday. The PBOC lower the dollar's fix slightly, but the proverbial toothpaste is out of the tube and officials are struggling to...

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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 the last two years slightly...

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Greenback Surges after BOJ Hikes and Ends YCC and RBA Delivers a Dovish Hold

Overview: 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. The Bank of Japan's rate hike and the end of Yield Curve Control were not seen as the start of the tightening cycle. The two-year JGB yield slipped to a two-week low and settled below its 20-day moving average for...

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Heightened Speculation of a BOJ Move Tomorrow did not Stop the Nikkei from Rallying or Yen from Slipping

Overview: The US dollar is trading with a mostly softer bias against the G10 currencies. The notable exceptions are the Japanese yen and Swiss franc. Ironically, speculation of a Bank of Japan rate hike appears to have increased, while there is a risk that the Swiss National Bank cuts rates this week. The Norwegian krone is the strongest of the major currencies. The central bank meets later this week but is widely expected to stand pat. The continued rise in oil...

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

Overview: 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. This has helped lift the dollar against all the G10 currencies this week. As is often the case in a firm US dollar environment, the Canadian dollar has fared the best,...

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Strong US Retail Sales may Help Extend the Dollar’s Recovery

Overview: We have put emphasis on today's US retail sales report. A recovery from the weather-induced weakness in January should underscore the resilience of US demand after another 200k jobs were created and personal income jumped 1%. While the dollar has traded firmer in the first half of this week, given the 25 bp jump in the US two-year yield, its performance is somewhat disappointing. It is narrowly mixed in the European morning against the G10 currencies. The...

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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. The Dollar Index had begun with week with a six-day fall in tow. Today is it is rising for the third session. However, the gains have been a modest 0.80% off the pre-weekend lows. The dollar broadly is consolidating in narrow ranges thus far today in quiet...

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