US Dollar

[Vichu]

Dollar heads towards one-year highs as trade concerns dominate

The dollar rose on Monday, edging towards a one-year high, as escalating trade war rhetoric between the United States and its trading partners helped the U.S. currency.



Chinese stocks slumped nearly 2 percent as Beijing proposing tariffs on $60 billion worth of U.S. goods on Friday, while a senior Chinese diplomat cast doubt on prospects of talks with Washington to resolve the conflict.
“The trade war concerns are supporting the dollar and there is a bit of a risk-off tone in the markets,” said Manuel Oliveri, a currency strategist at Credit Agricole in London.
The dollar index, which measures it against a basket of six other major currencies, was about 0.2 percent higher at 95.27, heading back towards a more-than-one-year peak of 95.652 reached on July 19.
The dollar gained against emerging-market currencies as we.. The Turkish lira weakened 0.6 percent, reaching a record low of 5.12 to the dollar after the United States announced late Friday it was reviewing Turkey’s duty-free access to U.S. markets – a move that could affect nearly $1.7 billion of Turkish imports.


Currency markets remained cautious, with high-yielding currencies such as the Australian dollar weaker against the yen and the Swiss franc.



With Friday’s U.S. jobs data broadly indicative of a strong economy and July inflation data due later this week, markets are primed for a further increase in U.S. Treasury yields, which should support the dollar.
Yields on two-year U.S. debt have climbed nearly 40 basis points since April while the dollar has risen nearly 7 percent since then.
Efforts by the Chinese central bank to curb currency weakness have proved ineffective. Both the onshore and offshore yuan were slightly weaker against the dollar.
China’s central bank said it would set a reserve requirement ratio of 20 percent from Monday on financial institutions settling foreign exchange forward dollar sales to clients, effectively raising the cost for investors of betting against the yuan.
Elsewhere, the euro held at a five-week low of $1.1550.

Bart Wakabayashi, Tokyo branch manager at State Street Bank said the negative impact on markets from the trade tariff exchanges between Washington and Beijing is not as acute it had been previously.

[Vishnu]

Forex - Dollar Under Pressure as Yuan Stabilizes, Euro Rallies

The dollar fell against its rivals Tuesday, pressured by a rise in the Chinese Yuan as the People's Bank of China reportedly made a fresh attempt to steady the currency.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.22% to 94.99.
The People's Bank of China, PBoC, urged some lenders to prevent any “herd behavior” in the currency market, Bloomberg reported, citing people familiar with the matter.
Some said the request from China's central bank was an attempt at curbing large banks from initiating the same positions as clients, or engaging in "herd behavior," amid a recent wave of bets against the yuan.
The move helped stabilized the offshore yuan and arrived just days after the PBoC on Friday raised the cost of shorting the currency.
A falling yuan runs the risk of large investment outflows from the China at a time of heightened concerns that President Donald Trump could up the trade-war ante with harsher trade penalties, stifling China's economy.
USD/CHN fell 0.56% to 6.8272.
U.S. economic data showing U.S. job openings undershot economists' estimates did little to help the greenback's attempt at paring losses.
The U.S. Labor Department's latest Job Openings and Labor Turnover Survey(JOLTS) report, a measure of labor demand, showed job openings in June came in at 6.66 million, missing expectations of 6.74 million.
Elsewhere, a stronger euro also weighed on the dollar, despite a steeper-than-expected decline in German industrial production.
EUR/USD rose 0.34% to $1.1592, while USD/CAD rose 0.22% to C$1.3031.
GBP/USD rose 0.06% to $1.2951, but remained at 11-month lows as fears of a no-deal Brexit offset upbeat U.K. house price data.
USD/JPY fell 0.14% to Y111.25, while USD/CHF fell 0.22% to 0.9951.

[Vichu]

Dollar loses the 96 handle on Trump's criticism of the Fed

Forex today was seeing more weakness in the greenback, stemming from Donal Trump's disapproval of the Fed's interest rate policy which is having an effect on the dollar and potentially undoing all of the 'good' work by the Trump administration for the US economy.
Traders, just as they did a month earlier, almost to the day, sold the greenback in response to Trump's alleged comments that were supposedly made on Friday behind doors in a private meeting between the 1% club. " U.S. President Donald Trump said on Monday he was “not thrilled” with Federal Reserve Chairman Jerome Powell for raising interest rates and accused China and Europe of manipulating their respective currencies," - RRTS reported. It will now be interesting to see what Powell hits back with as Central Bankers gather at this week's Jackson Hole where it is highly likely that the theme of the dollar will be a hot topic for discussions at the event. Gillian Tett, Financial Times US managing editor, who has spent time over the years with Powell, suggested to CNBC today that he will not take this lying down and that he may even address the US public directly if such pressures continue to come along.


Currency action
Meanwhile, the dollar fell to a low of 95.7290 from 96.4020 but the dollar remains above water so long as it remains higher than 94.80. US yields also dropped to 2.81 from 2.87% as equities picked up investor's idle capital placement preferences.
As for the euro, this ended higher by +0.4% and squeezed higher for the fourth day running. However, CFTC data has shown that speculative positioning actually turned short for the first time since May 2017, so, speculators are decreasing long positions which makes for a tough time ahead. The price needs to hold at this juncture being 50% of the 2016-18 rally at 1.1448 and get onto the 1.15 handle before time takes its toll. There could be some more short covering to go until the end of the week's talks between US and Chinese officials, the FOMC minutes and indeed the Jackson Hole, and that brings in a target of 1.1520 to pare back the 10th August supply.

GBP/USD has had no domestic fundamentals to go with at the start of this week so far, although the no-deal Brexit vide is still alive and that hinders the pounds progress even in light of a weaker dollar. The pound has been pretty much riding the coat tails of the euro and that is evident in the cross. GBP/USD, was, however, firm into the close in the North American session and ended at 1.2785, +0.28% from within an NY range of between 1.2788-1.2749 while probing the key 10-D SMA. EUR/GBP ended the NY session at 0.8965 from within Monday's range of between 0.8974-0.8940. Lingering Brexit angst favours the left-hand-side while the BoE is known to be on hold now for the foreseeable future. Brexit talks will have started again this week as the UK's Brexit Secretary will be arriving in Brussels tomorrow after a short summer break in Brexit talks. The negotiations will include discussions on future relationship tomorrow and remaining issues on the withdrawal agreement on Wednesday.


USD/JPY was making its lowest close in seven weeks and actually went on to break below the 110 handle marking a low of 109.90 in early Asian trade as the dollar slides a little further across the board in thin trade. It closed NY at 110.06 and below the 110.46 daily Cloud base support. This is a significant move with the price testing below the 100/200-D SMAs around 109.97/88 as yields fall away and the spread narrows. EM derisking is likely to continue to support the yen.
As for the commodity complex, it bounced and the CRB holds in there above the neckline still. However, there remain plenty of risks out there for the sector and indeed EMs are vulnerable to a swift change of hearts in a fickle marketplace at the moment - hanging in the balance of geopolitics and heightened feuds between the US/China, US/Turkey. Copper and metals were a supportive factor in the Aussie's extension to the upside on Monday. china is reported to be looking to increase its infrastructure spending which supports commodity prices, especially metals.

[tradeforexcopier]

U.S. Dollar Falls After Jobs Report

The U.S. dollar fell on the subject of Friday after the September jobs financial savings account came in lower than traditional and 10-year Treasury yields rose to a seven-year high.The U.S. dollar index, which events the greenbacks strength adjoining a basket of six major currencies, fell 0.15% to 95.329 as of 9:05 AM ET (13:05 GMT).
The U.S. economy created less jobs than usual in September, but unemployment reached a 48-year low, indicating the economy could be plateauing.Nonfarm payrolls rose by 134,000 compared to expectations for a 185,000 get your hands on.

Payroll gains for August were revised to 270,000 from the 201,000 initially reported, even though July was revised taking place to 165,000 from 147,000. The unemployment rate fell to 3.7%, a level not seen back 1969. Average hourly earnings, an important number to gauge inflation, rose 2.8% year on summit of year in September.

Meanwhile expectations for a Federal Reserve rate extra in December rose slightly to 77.7%.
After the data freedom, the comply regarding the benchmark United States 10-Year Treasury note jumped to 3.227%, a level not seen back 2011.

Elsewhere the euro was slightly difficult, even though sterling surged along along with reports that the European Union and the UK are in the unlimited Brexit negotiation stages.EUR/USD increased 0.10% to 1.1525 and GBP/USD rose 0.45% to 1.3078.

The dollar slid lower against the yen, taking into account USD/JPY alongside 0.07% to 113.80
The Australian dollar was higher, taking into consideration AUD/USD happening 0.06% to 0.7078, even if NZD/USD fell 0.09% to 0.6474.

The loonie inched occurring after the employment rate came in much greater than stated. USD/CAD dipped 0.02% to 1.2925.

[Vishnu]

Dollar rises on firmer U.S. yields; yuan struggles

The dollar edged higher onTuesday as firmer U.S. Treasury yields encouraged investors tobuy the greenback after a recent drop with investors growingmore bullish about its short-term outlook, especially againstemerging market currencies.
While the dollar has struggled to extend gains against theeuro and the sterling in recent days, it has strengthenedagainst its emerging market counterparts and pinned the Chineseyuan to a two-month low.

Against a basket of its rivals =USD , the dollar rose 0.1 percent at 95.13. It has fallen 1.2 percent in the last eightsessions to a three-week low.
But an emerging market currency index .MIEM00000CUS washolding near its lowest levels in 1-1/2 years, indicating thedivergence of the dollar's performance against its peers.
The euro EUR=EBS remained broadly on the back foot,holding around $1.1573 against the greenback after the Italiancabinet on Monday signed off on an expansionary 2019 budget toset up a showdown with authorities in Brussels over compliancewith EU rules. urn:newsml:reuters.com:*:nL8N1WW1AI
The New Zealand dollar NZD=D3 advanced 0.24 percent versusthe U.S. one to trade at 0.6567 as the domestic inflation ratewas higher than expected in the third quarter. urn:newsml:reuters.com:*:nL8N1WV068
The Japanese yen JPY= weakened by 0.19 percent on Tuesdayand changed hands at 111.97. The yen had hit a one-month high of111.61 on Monday.
The Swiss franc CHF= weakened 0.17 percent versus thedollar to trade at 0.9886 on Tuesday, after tacking on 0.45percent overnight.

[Vishnu]

Dollar supported by hawkish Fed, yen bounces after hitting 5-week low



The dollar gained versus the euro and sterling on Friday as the U.S. Federal Reserve kept interest rates steady but reaffirmed its monetary tightening stance, setting the stage for a rate hike in December.
In foreign exchange markets, investor focus is now shifting back to the divergence between the monetary policies of the United States and other major economies, such as Japan where interest rates are seen staying extremely low. The yen, as a result, remains near a five-week low against the dollar.
The dollar index, a gauge of its performance against six major peers, traded at a fresh one-week high at 96.75.
“The Fed looks set to raise rates in December. They have been largely unfazed by the equity market correction in October,” said Ray Attrill, head of currency strategy at NAB.
Attrill added that the dollar strength also follows a weak euro and a jittery sterling over the last few trading sessions.
The Fed has raised its key policy rate three times this year, and the market expects another rate hike in December on the back of a robust U.S. economy, rising inflation and solid jobs growth.
According to the CME group’s FedWatch tool, the likelihood of the Fed raising rates by another 25 basis points in December is 75 percent.
Analysts are also expecting more rate hikes by the Fed next year.
“We anticipate two more hikes in 2019: one in March and one in June,” Kevin Logan, chief U.S. economist at HSBC, said in a note. The yen reversed course after hitting a five-week low versus the dollar to trade at 111.86 on Friday.
The dollar has gained 2.24 percent versus the yen over the last 10 trading sessions due to the diverging monetary policies of the Fed and the Bank of Japan.
While the Fed is on track to raise interest rates, the BOJ is expected to keep its ultra loose monetary policy due to low growth and inflation.
The widening interest rate differential between U.S. and Japanese bonds has made the dollar a more attractive bet than the yen, which is often a funding currency for carry trades.
Meanwhile, the euro traded at $1.1342 on Friday, losing 0.18 percent versus the greenback. The single currency fell 0.54 percent on Thursday as traders reacted to negative news out of Europe.
The European Commission forecast on Thursday that the Italian economy would grow more slowly than Rome thinks in the next two years, leading to much bigger budget deficits than assumed by the new government.
The standoff between the EU and Rome over Italy’s budget deficit and concerns over Europe’s slowing economic growth have dragged the euro which has fallen 4.2 percent versus the dollar over the last six months.
The British pound changed hands at $1.3049 on Friday, trading marginally lower versus the dollar. Sterling has gained 2.3 percent against the dollar in November.


The pound has benefited from growing investor expectations that Britain is close to reaching a deal with the European Union, less than five months before it is due to exit the bloc.
The Australian dollar lost 0.21 percent to trade at $0.7241 as sentiment was dampened by worries about rising U.S.-Sino trade war tensions. China is Australia’s largest trade partner and a weakening of sentiment towards China does not bode well for the Aussie dollar.

[Vishnu]

Dollar Subdued as Sterling Shines on Brexit Divorce Deal Agreement

The dollar eased against its rivals Tuesday, amid a surge in sterling after the European Union and Britain agreed a draft text of a Brexit withdrawal agreement, though doubts lingered about whether the U.K. parliament would back the deal.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, fell by 0.20% to 97.19.
Prime Minister Theresa May will present a draft text of a Brexit withdrawal agreement to her senior ministers on Wednesday after both the UK and EU reached consensus on the Brexit divorce deal.
The divorce deal, however, is widely expected to meet opposition in the UK parliament.
"The problem is it has to come to parliament, and all we know about the views of different people across the political spectrum is a deal of this kind is not going to get through," Liberal Democrat leader Vince Cable told the BBC on Tuesday.
GBP/USD rose 0.79% to $1.2950, while EUR/USD rose 0.35% to $1.1258.
The dollar's recent run up toward 18-month highs has been met with skepticism, with some analysts warning that the gap between U.S. rates and that of the rest of the world, which has played a large part in propping up the greenback, will likely narrow next year.
This year, the dollar rose on expectations that the Federal Reserve would hike interest rates faster and by more than the its peers, but "recent trends in labor markets and wage growth outside the U.S. do not justify such benign monetary policy expectations," said Vasileios Gkionakis, global head of forex strategy at Banque Lombard Odier.
USD/JPY rose 0.05% to Y113.90 ahead of Japanese GDP data slated for late-Tuesday.
USD/CAD, meanwhile, rose 0.10% to C$1.3260 as an ongoing slump in oil prices kept a lid on gains in the oil-price-sensitive loonie.

[Vishnu]

Dollar Rises After Equity Selloff

The U.S. dollar rebounded on Tuesday as Wall Street tumbled amid worry over retail earnings results.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rallied 0.37% to 96.42, as of 11:06 AM ET (16:06 GMT),
The Dow fell more than 400 points after the opening bell, as Wall Street opened in the red for the second consecutive day.
Retail earnings from Target (NYSE:TGT) and other companies came in lower than expected, increasing worry over the holiday sales season.
Meanwhile, data on Tuesday showed that the U.S. housing sector could be a cause for concern. The number of housing starts in the U.S. rose broadly in line with expectations in October, but building permits declined.
The dollar was slightly higher against the safe-heaven Japanese yen, with USD/JPYrising 0.03% to 112.58. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
Elsewhere, the euro fell as European equities sank over continued political pressure between the European Commission and Rome. EUR/USD slipped 0.42% to 1.1405.
The pound was also down amid Brexit worries, with GBP/USD falling 0.30% to 1.2817. The NZD/USD decreased 0.16% to 0.6827, while AUD/USD was down 0.52% to 0.7255.

[Vishnu]

Dollar Rises on Less Dovish Comments From Fed’s Clarida

The dollar rose on Tuesday after less dovish comments from Federal Reserve Vice Chairman Richard Clarida.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, rose 0.19% to 97.16 as of 10:25 AM ET (15:25 GMT).
Clarida noted in a speech on Tuesday that interest rates are closer to neutral. The central bank should take a gradual approach to rising rates based on data, he added.
“As the economy has moved to a neighborhood consistent with the Fed’s dual-mandate objectives, risks have become more symmetric and less skewed to the downside than when the current rate cycle began three years ago,’’ he said.
His comments helped boost the greenback, which often rises when interest rates are increased.
Meanwhile, the dollar was kept in check by U.S.-China trade worries after President Donald Trump told The Wall Street Journal that it is “highly unlikely” that he will hold off on raising tariff rates on China on Jan. 1.
The dollar was higher against the safe-heaven Japanese yen, with USD/JPY rising 0.11% to 113.71. In times of uncertainty, investors tend to invest in the Japanese yen, which is considered a safe asset during periods of risk aversion.
The euro was also lower due to the stronger dollar, with EUR/USD falling 0.18% to 1.1308.
The pound remained low, with GBP/USD falling to 1.2747 after Trump said the Brexit draft deal is a good deal for the EU, prompting worry that the UK will not be able to trade as easily with the U.S.

[Vichu]

Dollar Slips After U.S.-China Trade Truce

The dollar was lower on Monday after the U.S. and China agreed to a temporary trade war truce, while sterling inched down amid worries over Brexit.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.30% to 96.90 as of 10:28 AM ET (15:28GMT).
Investors turned away from risk-averse assets after U.S. President Donald Trump and Chinese President Xi Jinping agreed at the G20 summit to hold off on increasing tariffs as the two continue trade talks. Trump agreed not to increase tariff rates on $200 billion worth of Chinese goods, while Xi agreed to purchase more American goods and reduce tariffs on U.S. car imports.
Meanwhile, Federal Reserve Vice Chairman Randal Quarles said that while the Fed continues to watch data it shouldn’t react “to every wavering of the needle.”
The dollar has been pressured recently over comments from Fed Chairman Jerome Powell that rates are near neutral, leaing to speculation the central bank could stop increasing interest rates soon. Powell was expected to testify at Congress on Wednesday, but the hearing was cancelled due to a national holiday in remembrance of President George H.W. Bush, who died on Friday.
The dollar was flat against the safe-heaven Japanese yen, with USD/JPY at 113.59.
The pound inched down as traders worried that UK Prime Minister Theresa May won’t get the votes she needs in Parliament to pass the Brexit draft agreement next week. GBP/USD fell 0.13% to 1.2731.
The euro was higher, with EUR/USD up 0.31% to 1.1352.
Elsewhere, NZD/USD jumped 0.96% at 0.6932, while AUD/USD increased 0.85% to 0.7366.