After another strong US payroll report last Friday, talk of US ‘exceptionalism’ continues to grow and, with it, the risk that the Fed won’t deliver significant rate cuts...
The Bank of Japan lifted the short-term policy rate for the first time in seventeen years last week but the yen still languishes close to its weakest level against...
Last week, we saw the third attempt by US dollar/yen to really break through the 150 level that has proved an insurmountable barrier twice before since October 2022.
The by-product of this is plunging FX volatility, something that usually works to the benefit of risker currencies.
The US dollar has risen against the euro and the pound even though policy rate differentials have been very stable, particularly with respect to the UK.
Where is the US dollar likely to trade against other G10 countries over the long haul?
We’ve already seen in the space of a few short weeks the market adjust its expectations for rate cuts this year from around six 25-bps reductions to four.
We’d still expect the US dollar to rally for the safe-asset reasons.
A cyclical economic recovery takes hold, the euro will claw back some lost ground, perhaps particularly against the US dollar.
BoJ could intervene again, but the situation for US dollar/yen now does not appear as precarious as it was when the BoJ intervened back in the autumn of 2022.
The US’s dominant position in global finance clearly allows the country to stretch the elastic on fiscal discipline, and the general level of external debt, in a way...
Last week’s FOMC meeting was generally seen as somewhat more hawkish than expected. A few days later, US payroll data for January was a lot stronger than anticipated....
In some ways we can look at the valuation of the dollar as something of a balancing act.
The global economy has defied a hard landing in 2023. As 2024 unfolds, a new but more complex economic landscape is taking shape.
Some people said the more the US dollar is lent internationally, the weaker the US dollar becomes. So, which is correct?
History shows that Republican presidents are more likely to preside over a falling US dollar, but Trump’s first term was a little better than his predecessors.
There has been some talk recently that political parties vying to win this year’s UK election could propose the sort of fiscal largesse that rekindles memories of the...
The US dollar has started 2024 in pretty stable fashion and this stability may continue until two key questions are answered: will the Fed ease policy as the market...
In 2024, the BoJ seems likely to start the process of lifting policy rates and if we assume that most other G10 central banks start to cut, there’s a good chance for the...
The US economy is streets ahead of its peers, but the US dollar is not. Does this mean that there’s something wrong with the US dollar?
The euro has come under some modest pressure recently against other developed currencies.
There have been a couple of reports recently that seem to flag the possibility, maybe even the probability, that the sharp rise in policy rates will cause adverse...
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