The dollar ended little changed on Friday, pressured by a fall in Treasury yields after a tame U.S. inflation report that investors said kept the runway for the expected September Federal Reserve easing clear. The Commerce Department’s June personal consumption expenditures (PCE) price index nudged up 0.1%, as expected, after being unchanged in May, underscoring an improving inflation environment. Year over year, the PCE price index climbed 2.5% after rising 2.6% in May, also in line with forecasts by economists polled by Reuters. The Fed closely tracks the PCE price ...

U.S. cryptocurrency exchange Coinbase has added three new members to its board of directors, including an executive from ChatGPT-maker OpenAI, as the company steps up its efforts to sway U.S. crypto policy, Coinbase told Reuters on Thursday. The new members are Chris Lehane, a member of the executive team at OpenAI; Paul Clement, former U.S. Solicitor General under President George W. Bush; and Christa Davies, chief financial officer for Aon and a board member for Stripe and Workday. The additions will expand the board from seven to 10. Coinbase’s move ...

USD: Risk off might be dollar negative Markets are in a risk-off mood, where US earnings this week have failed to arrest the correction in tech stocks. The Nasdaq was off a large 3% yesterday and the Magnificent Seven is now down 12% from its highs earlier this month. In retrospect, buy-side investor surveys from late June proved telling in that they showed a buy-side fully committed to risk (cash levels very low), with the three most crowded trades being 1) Long the Magnificent Seven 2) Short China equities and ...

The Canadian dollar weakened to a three-month low against its U.S. counterpart on Wednesday as the Bank of Canada lowered interest rates, as expected, for a second time in two months and signaled it was likely to ease further. The Bank of Canada cut its benchmark rate by 25 basis points to 4.5% and said more reductions in borrowing costs were likely if inflation continued to cool in line with forecasts. In June, the BoC became the first G7 central bank to begin easing policy. “The market initially is taking ...

Most currencies in Asian emerging markets drifted within tight ranges on Wednesday as traders awaited U.S. inflation and growth data ahead of the Federal Reserve meeting next week to validate bets of two U.S. rate cuts over the rest of the year. Equities in the region retreated slightly. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS and the index of Asian emerging markets equities .MIMS00000PUS slipped up to 0.3%, with the former stuck near three-week lows. Investors are waiting for U.S. personal consumption expenditures (PCE) data – the Fed’s ...

The Canadian dollar weakened for a fifth straight day against its U.S. counterpart on Tuesday as commodity prices fell and investors braced for a potential interest rate cut by the Bank of Canada. The loonie was trading 0.2% lower at 1.3773 to the U.S. dollar, or 72.61 U.S. cents, after touching its weakest level since June 14 at 1.3775. It was the longest stretch of declines for the currency since April. “Canada is just kind of following the drift down in the commodity complex,” said Michael Goshko, senior market analyst ...

USD: Equity recovery is keeping volatility low Away from US politics, FX markets remain very subdued. Volatility is low and the temptation will be to rotate back into carry even if there are risks associated with the preferred funding currency (Japanese yen) or the preferred target currency (Mexican peso). Helping to keep volatility low is a dry spell for macro and central bank calendars, plus some modest recovery in global equity markets. On a quiet day, we think investors will take a keen interest in US earnings releases, where tonight ...

China surprised markets by lowering a string of major short and long-term interest rates on Monday, in an effort to boost growth in the world’s second-largest economy. Analysts said the move showed the yuan, which has been undermined all year by its low yields versus U.S. rates, is less of a priority than growth. WHY IT’S IMPORTANT A weakening yuan has been considered a constraint on the People’s Bank of China’s (PBOC) monetary easing efforts, and investors had widely expected the PBOC would wait till the Federal Reserve started rate ...

USD: Looking for some ‘goldilocks’ data As we mentioned Friday, it looked like investors had already started to price President Joe Biden’s withdrawal from November’s race. The DXY dollar index opened in Asia today about 0.1% lower on the news, but quickly edged higher, as did US yields. Investors will now switch their attention to how Kamala Harris fares against Donald Trump in the opinion polls – assuming she is appointed the presidential candidate at the Democratic National Convention on 19-22 August. On the subject of politics, it looks like ...

The dollar eased slightly against a basket of currencies on Monday while dropping sharply versus the yen as investors focused on U.S. President Joe Biden’s decision to end his re-election campaign and the next moves from the Federal Reserve and the Bank of Japan. Analysts said the Japanese currency could be at a turning point after falling since the beginning of 2024 as the Fed is close to cutting rates and the BoJ is widely expected to tighten its monetary policy soon. The Federal Reserve Open Market Committee will meet ...

China’s Loan Prime Rates It is a quiet week ahead for China in the aftermath of the Third Plenum and key data releases over the past week. The People’s Bank of China announces the 1 year and 5 year loan prime rates on Monday, where expectations are that the rates will remain unchanged after no change was made to the MLF this month. No major data is expected out of China for the next week. Taiwan’s Export Orders Taiwan is set to publish its export orders data on Monday, where ...

The dollar climbed on Friday and was set to snap a two-week streak of declines as a worldwide cyber outage that affected banks, airlines and broadcasters unnerved investors, although volatility in the currency markets was largely contained. crippled industries from travel to finance before services started coming back online after hours of disruption, highlighting the risks of a global shift towards digital, interconnected technologies. The dollar index was on track for its second straight daily advance, its first in two weeks, to put the greenback on pace for its first ...

Traders on Thursday kept the euro on course for a strong comeback as prospects for the European Central Bank turning cautious after an expected second rate cut in September swept anxiety about French politics out of the currency’s path. With global markets lined up for quick-fire U.S. rate cuts, the ECB signalled heightened concerns about volatile inflation, helping to sustain an upward shift for the euro that is near four-month highs after being shaken by French government turmoil in June. The ECB left its deposit rate unchanged at 3.75% after ...

The dollar was poised to snap a two-week losing streak on Friday as traders pondered the U.S. rates outlook, while the yen was steady after inflation in Japan accelerated for second month in a row, keeping the prospect of a rate hike there on the table. The U.S. dollar was on the front foot in Asian hours after a stormy week that saw the yen, euro and sterling make significant gains against the greenback as investors fully price in a rate cut from the Federal Reserve as soon as September. ...

The half-time review As we suggested in our annual outlook, the Japanese economy is experiencing a slower recovery while inflation is staying above the Bank of Japan’s (BoJ) target range. Our forecast for GDP growth changed little from an initial 1.2% year-on-year to 1.0%. The safety scandal in the auto sector unexpectedly hampered first-quarter 2024 growth, but stronger growth in tech exports and tourism is likely to partially offset the decline. Another forecast was that the Reserve Bank of India (RBI) would be one of the first major APAC central ...