US Dollar Dips; Yen Rebounds on Verbal Intervention
A dollar gauge traded weaker as the market awaits the Federal Reserve policy decision mid-week. The yen snapped a seven-day losing streak after officials verbally intervened.
The Bloomberg Dollar Spot Index fell 0.2%, dropping for a second straight day ahead of the Fed’s rate decision on Wednesday, with traders expecting a quarter-point cut
ADP Research will now be releasing US payroll data on a weekly basis, in addition to its monthly report, to provide high-frequency insights into the labor market
Amazon said it was cutting about 14,000 jobs in a major restructuring, shifting focus to the health of the US labor market
“The dollar is a little weaker across the board in quiet trading conditions,” said Chris Turner, head of FX strategy at ING. “In a market deprived of US data by the government shutdown, there may be more focus than usual on reports that Amazon plans to cut jobs”
“USD has scope to soften from the stronger side of the recent range especially with a dovish Fed reaction function and likely end to QT this week,” said Nomura strategists Dominic Bunning
One-month implied volatility for the dollar gauge is at lowest since May of 2024
USD/JPY fell 0.5% to 152.05; drops for the first time in eight days
US and Japanese leaders pledged to tighten security cooperation and increase defense funding
US Treasury Secretary Scott Bessent discussed the role of monetary policy in preventing excess exchange rate volatility, while Japanese authorities said they will keep monitoring the impact of yen weakness on the economy
USD/CAD fell 0.4% to 1.3941; the Bank of Canada to decide on rates Wednesday as well
The market is pricing in close to a 25bp cut and Rabobank strategists said it will be the last reduction in this cycle
EUR/USD climbed 0.2% to 1.1664
Inflation expectations among euro-area consumers were little changed in September
Wells Fargo’s Erik Nelson says buy EUR/GBP with a target of 0.8910, stop at 0.8665
Nelson suggested holding this position for about a month “leading into the UK budget”
EUR/GBP rose 0.6% to 0.8782 on the day
GBP/USD fell 0.4% to 1.3282
UK 10-year yields neared a year-to-date low after food prices dropped.
The British pound was the worst performing currency in the Group of 10 against the dollar.
Source : Bloomberg.com
