The Federal Reserve’s top regulatory official said on Fridaythe central bank is “a long way” from any decision on whether it would issue its own digital currency, and added it would not do so without official support in Washington. Fed Vice Chair for Supervision Michael Barr said while officials are investigating a central bank digital currency (CBDC), the Fedwas far from any decision. He added it wouldonly proceed with one with “clear support” from the president and authorizing legislation from Congress. “In my view, as both the issuer of U.S. ...

The dollar fell on Friday but was still headed for its longest weekly winning streak in nine years, bolstered by a resilient run of U.S. economic data that has also put the end of the Federal Reserve’s aggressive rate-increase cycle into question. China’s onshore yuan meanwhile dropped to its lowest level since 2007, as it battles capital outflow pressures and a widening yield gap with major economies. The U.S. dollar index, which measures the greenback against major peers, was last 0.1% lower at 104.93 but remained not far from the ...

The dollar fell on Friday but was still headed for its longest weekly winning streak in nine years, bolstered by a resilient run of U.S. economic data that has also put the end of the Federal Reserve’s aggressive rate-increase cycle into question. China’s onshore yuan meanwhile dropped to its lowest level since 2007, as it battles capital outflow pressures and a widening yield gap with major economies. The U.S. dollar index, which measures the greenback against major peers, was last 0.1% lower at 104.93 but remained not far from the ...

Sterling held at a three-month low against a stronger dollar on Thursday, as traders focused on dovish signals from the Bank of England and moderating corporate inflation expectations. The dollar firmed on Thursday after U.S. jobless claims hit their lowest level since February, moving in the opposite direction to economists’ forecasts and raising expectations for higher U.S. rates for longer. Sterling softened versus the dollar as a result. “In the UK we also had Bailey’s comments yesterday which were quite dovish, at least on the surface, and this means that ...

USD: 2024 part of the USD curve driving dollar higher September has so far seen the dollar’s bullish momentum cement, and DXY is testing the 105.00 levels this morning – the highest seen since March. We want to stress that the bulk of the dollar strengthening is coming from easing bets in 2024 being scaled back rather than any expectations that the Federal Reserve will hike again this year. Let’s take the pricing of the USD forward rate curve for the two meetings in November 2023 and June 2024 as ...

The dollar edged up after pushing the yen to a 10-month trough on Thursday and kept the euro and sterling pinned near three-month lows, as investors placed their hopes on a still-resilient U.S. economy. Against a basket of currencies including the euro and sterling, the dollar rose 0.05% to 104.91, holding on to some of its gains from the previous session after scaling a six-month peak as the U.S. services sector unexpectedly gained steam in August. The greenback scaled a fresh top of 147.875 yen in early Asia trade, its ...

The dollar ascended to a six-month peak on Wednesday, reversing earlier losses, after U.S. data showed the services sector surprisingly picked up steam last month amid higher new orders and businesses paying elevated prices, suggesting persistent inflation pressure. The greenback recovered against most currencies after the data, with the euro and sterling hitting three-month lows and the yen touching session troughs. Data showed the Institute for Supply Management (ISM)’s non-manufacturing PMI rose to 54.5 last month, the highest reading since February and up from 52.7 in July. A reading above ...

USD: ISM services the only threat to an otherwise bullish story The relentless rise of the dollar continues. The DXY yesterday pushed up to the highest levels since March as US yields once again edged higher. While the busiest day in US investment-grade corporate issuance in three years has surely been weighing on US treasuries, the FX market has also come under the spell of higher energy prices. The Saudis have this week confirmed their plan to roll over their 1mn barrels per day supply cut into December. This is ...

The dollar held close to a six-month peak as jitters over China and global growth weighed on risk appetite, while the yen strengthened as Japan’s top currency diplomat sent a warning about the currency after it earlier dropped to a 10-month low. The yen strengthened by as much as 0.4% to 147.02 per U.S. dollar after Japan’s top currency diplomat, Masato Kanda, said they won’t rule out options if speculative moves persist, the strongest warning since mid-August. By 0813 GMT, it stood at 147.47 per dollar, compared with 147.82 earlier ...

A deteriorating global growth picture sent the pound to a 12-week low against the dollar on Tuesday after a survey showed business activity in Britain contracted last month. The UK S&P Global/CIPS composite Purchasing Managers’ Index (PMI) dropped to 48.6 in August from 50.8 in July, the lowest since January, although it was revised up from an earlier estimate of 47.9. The services sector PMI printed at 49.5, below the half century mark that separates growth from contraction. “The forward-looking indicators in today’s services survey remained downbeat as companies reported ...

USD: Comfortably overvalued With US trading halted yesterday for the Labour Day holiday, global FX markets started the week on a very quiet tone after Friday’s big swings. In short periods like this one where attention temporarily shifts away from the US, developments in China emerge as the main driver for global sentiment. Yesterday, hopes of fiscal stimulus triggered a rebound in Chinese property stocks, but a below-consensus read in the Caixin Services PMI overnight generated fresh pressure on Asian equities. While the equity compartment appears to respond more symmetrically ...

Jitters about global growth caused the dollar to rise on Tuesday, sending the euro to its lowest in nearly three months and the Aussie down over 1%, not helped by underwhelming data in China and the Reserve Bank of Australia keeping rates steady. The euro was down 0.45% at 1.0747, while sterling fell 0.6% to $1.2555, with both their lowest levels since mid June after poor activity data in China and Europe drove a risk off tone across asset classes. China’s Caixin services PMI was at levels last seen when ...

Turkish depositors mostly converted funds back to dollars last month when they withdrew from state depreciation-protected accounts, according to initial data and senior bankers, as Ankara begins winding down the scheme in a broad policy U-turn. Since President Tayyip Erdogan won re-election in May, authorities have raised interest rates sharply under the U-turn and set a goal of reducing the near $130 billion-worth of lira currently held at the accounts, known as KKM. The central bank protects deposits from depreciation under KKM, adopted in late 2021 to arrest a historic ...

The dollar is unlikely to lose its status as the global reserve currency anytime soon, even as the expansion of the BRICS group of developing nations signals another challenge to the dollar’s dominance in the world economy, BNY Mellon said in a note. Leaders of the BRICS – Brazil, Russia, India, China and South Africa – invited Iran and Argentina, Saudi Arabia, the United Arab Emirates (UAE), Ethiopia and Egypt into the club at a summit last week in Johannesburg. One of the objectives of the BRICS is to find ...

USD: Little reason to offload dollar positions The dollar has had a good couple of months. It has been buoyed by domestic strength in the US economy and souring sentiment in key trading partners such as Europe and China. The source of that strong domestic demand in the US has been a tight labour market, which has powered consumption. Despite US wage growth softening in August and the unemployment rate finally climbing, US Treasury yields actually rose on Friday and the dollar strengthened. Driving that move may have been the ...