The pound dropped on Tuesday after a rise in Britain’s jobless numbers suggested fewer Bank of England rate increases could be needed in the coming months to bring down inflation, helping the broad dollar index to push back towards Monday’s five-week peak. Sterling dropped as much as 0.5% against the dollar to $1.2467 and also softened to 87.17 pence per euro after Britain’s unemployment rate unexpectedly rose to 3.9% in the three months to March as more people sought to get back into the jobs market. Current market pricing indicates ...

The dollar slid from a five-week high on Monday, pressured by a weak manufacturing index in New York state and as it consolidated gains made last week amid fears about the debt ceiling and the U.S. economy. In emerging markets, the Turkish lira sank to a near record low as weekend elections looked headed for a runoff, while the Thai baht rallied after a more decisive election result. The greenback took an early dive after data showed the New York Federal Reserve’s Empire State manufacturing index plunged to -31.8 this ...

USD: Debt ceiling jitters raise upside potential in near term The dollar enters a new week with a broadly unchanged set of sharply contrasting factors which saw it test the lows, first, and then rebound quite sharply in a rather eventful month of May. The two main opposing forces at the moment are the declining short-term US rates (as more Federal Reserve rate cuts are priced in) and the debt-ceiling impasse in Washington. The first force will be driven by data and Fedspeak today; the second by negotiations which should ...

What’s up with Asian FX? We spend a lot of time and effort forecasting individual Asian currency pairs against the US dollar. But most of the time, if you have a good idea where EUR/USD is headed, that’s all you really need to know. However, this year, Asian currencies have been showing more individuality and bucking the major EUR/USD trend, which has taken the USD erratically weaker. If we can figure out why, then we have a shot at answering whether this recent trend will continue, or whether Asian FX ...

The U.S. dollar fell slightly from a five-week high on Monday after a period of strength that has confused analysts. Meanwhile, The Turkish lira sank to a two-month low as weekend elections looked headed for a runoff, while the Thai baht rallied after a more decisive election result. The euro was up 0.27% against the dollar on Monday at $1.088, rebounding after falling 1.54% the previous week. That helped send the dollar index, which measures the greenback against six major peers, down 0.19% to 102.49. That was just below a ...

The U.S. dollar clung to modest gains against the euro on Friday and was headed for its biggest weekly gain since February, as uncertainty around the U.S. debt ceiling and monetary policy prompted a shift to safe havens. Analysts said the greenback may be benefiting as debt ceiling talks progress and markets rethink the narrative that the U.S. Federal Reserve will cut interest rates by year-end. Fed Governor Michelle Bowman said the central bank will probably need to raise rates further if inflation stays high, adding that key data so ...

It’s the best performing currency this year in the G10 group of advanced economies against the dollar. But sterling’s strengthening streak is about to be put to the test as a succession of rate hikes heighten worries about growth. Britain’s pound, at around $1.254, on Thursday edged back from recent one-year highs against the dollar GBP=D3, having been driven higher partly by expectations that U.S. rates will fall later this year while UK borrowing costs climb. On Thursday, the Bank of England lifted interest rates for the 12th successive time, ...

USD: All eyes on debt ceiling talks The dollar bounce seen yesterday was the result of some position-squaring and below-consensus data, while the still unstable risk environment caused by recessionary fears and the US debt ceiling stalemate keeps creating a breeding ground for more defensive positions in FX. Unsurprisingly, high-beta currencies (Scandies and Antipodeans) took the biggest hit yesterday, while the yen showed resilience. On the debt limit saga, there have been some tentatively encouraging comments by Republican negotiators, but a key meeting between President Biden and Congress leaders was ...

The U.S. dollar edged higher on Friday and was heading for its biggest weekly gain since February. The euro was down marginally against the dollar at $1.091, after falling to its lowest since April 11 the previous day at $1.09. Analysts said that the dollar may have benefited from its status as a safe-haven investment this week, with the U.S. debt ceiling standoff and some further worries about banks unnerving investors. Shares in U.S. lender PacWest plunged 23% on Thursday after revealing a sharp drop in deposits. They also said ...

China has dramatically increased use of the yuan to buy Russian commodities over the past year, with nearly all of its purchases of oil, coal and some metals from its neighbour now settled in the Chinese currency instead of dollars, multiple trading executives with direct knowledge of the matter told Reuters. The switch to yuan to pay for much of a roughly $88 billion commodities trade in the wake of the Ukraine war accelerates China’s efforts to internationalise its currency, at the expense of the dollar, although strict capital controls ...

A sell-off in the South African rand and bonds gathered pace on Thursday, as news reports that South Africa had provided arms to Russia spooked investors already concerned about the economic impact of crippling power cuts. The rand touched a low of 19.3250 against the dollar, down as much as 2.4% on the day and hitting its weakest since the record low set on April 6, 2020, early in the COVID-19 pandemic. By 1553 GMT the rand had pared some of its losses to trade around 1.6% weaker than its ...

Our economics team dissects yesterday’s US inflation report in this article, highlighting how price pressures remain elevated (another 0.4% month-on-month core print, in line with expectations), but also how there are some signs that service sector inflation is moderating, with used cars doing the heavy lifting in keeping prices sticky. With the Fed having focused on the ex-energy and ex-housing service inflation developments, markets probably read those encouraging signs and took the opportunity to increase their easing bets in the latter part of the year. Now, three full 25bp rate ...

The dollar rose on Thursday as the Chinese yuan dipped to a two-month low after more evidence of weakness in China’s post-COVID recovery clouded the outlook for the global economy. Sterling edged lower ahead of a key Bank of England meeting, with traders expecting a small hike and looking for signs of further rises in the months ahead. After sliding on the back of slowing U.S. inflation, which bolstered confidence that the Federal Reserve was done hiking interest rates, the dollar rose against the euro and other major currencies following ...

Sterling’s been down so long, this looks like up to most people. Against the dark mood surrounding the British economy and dour positioning on the pound over the past 18 months, spring appears brighter – even if the gloomy weather being endured by anyone living in the country might suggest otherwise. As with most western economies, 2023 in Britain has been fiendishly difficult year to parse so far. Doggedly double-digit inflation twinned with rising interest rates, labour strikes and fear of recession has intertwined with significant energy price relief for ...

The South African rand plunged to a three-year low on Wednesday after a steep drop in the previous day, while international and domestic government bonds also fell, as fears grew of scheduled blackouts known as loadshedding worsening during winter. At 1530 GMT, the rand was trading at 18.8750 against the U.S. dollar, its weakest level since early May 2020. On Tuesday, the rand had fallen about 1.7%. South Africa’s sovereign dollar bonds dropped, with longer dated maturities falling the most. At 1505 GMT the 2052 maturity was down 0.77 cents ...