Dollar Weakens as Aussie Lags Behind Peers; Yen Up
A dollar gauge fell after shifting between gains and losses throughout the day. The Australian dollar trailed peers in the aftermath of the central bank’s interest-rate cut and a dovish signal.
Traders are also watching G-7 finance ministers and central bank governors meeting in Banff, Canada
The Bloomberg Dollar Spot Index fell 0.2%
The options premium paid to hedge against a decline in the US currency against a basket of peers over the next year, relative to positioning for gains, reached the highest level since at least 2011 when Bloomberg started tracking
USD/CAD fell 0.2% to 1.3918
Canadian inflation eased to 1.7% in April from a year ago, but was above expectations
“Canada now faces greater risk of stagflation,” said Elias Haddad, senior markets strategist at Brown Brothers Harriman & Co. “Risk of stagflation will complicate the Bank of Canada’s easing cycle and undermine CAD on the crosses”
AUD/USD declined 0.6% to 0.6419 after the Reserve Bank of Australia cut rates by a quarter point to 3.85% as expected; Governor Michele Bullock said the board debated a potential 50 bps cut
“Indication from policymakers seems to be that at their July 8th meeting a 50bps reduction may make sense to accommodate a fragile financial environment,” strategists at Monex wrote in a note
USD/JPY fell 0.2% to 144.51
The yield on 30-year Japanese bonds climbed to the most since that maturity was first sold in 1999
Japanese Finance Minister Katsunobu Kato told reporters he’s arranging a bilateral meeting with US Treasury Secretary Scott Bessent during G-7 meetings this week, and they’ll discuss topics including foreign exchange
EUR/USD rose 0.4% to 1.1280
Source : Bloomberg
