Know What's Happening in Currencies
Know What's Happening in Currencies
Yen emerges as world’s cheapest funding currency, fueling a $435B carry‑trade
The Bank of Japan’s ultra‑loose stance has turned the yen into the cheapest source of funding globally, underpinning a massive carry‑trade that amassed roughly $435 billion between 2022 and 2024. A modest rate hike in March 2024 barely dented the trade, but markets remain wary of a sudden, aggressive tightening that could compress spreads and force borrowers to unwind yen‑denominated debt.
The People’s Bank of China set the USD/CNY reference rate at 6.8824, a 35‑month low for the dollar and a record‑strength yuan. The fixing, announced around 0115 GMT, follows a managed‑float system that permits a ±2% trading band. By choosing a stronger midpoint, the PBOC signals a willingness to counter depreciation pressures despite a firm US dollar. Market participants will watch whether the central bank allows the yuan to appreciate further later in the day.
The long-term outlook for the US dollar hasn’t changed. We remain in a major downtrend — something worth remembering during brief rallies like the one we just saw. The dollar is still sitting at a critical level, and these bouts of strength...
China’s e‑CNY has processed roughly $2.37 trillion in transactions over the past two years, buoyed by explicit government backing and a blanket ban on private cryptocurrencies. The digital yuan now anchors Project mBridge, a cross‑border payment network that has expanded to...
Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. warned that monetary policy has reached the limit of its effectiveness as the Philippine economy faces deep‑seated structural problems, not just liquidity shortages. Simultaneous shocks from oil prices above $100 per barrel...
If you know where the dollar is going, you know where global liquidity is going. $DXY just bounced hard off 96.65 multi-year support and is pressing into the $100 resistance zone. Momentum is improving with higher lows and rising RSI. Today’s pullback looks...
#BrazilWatch🇧🇷: Brazil's inflation is 4.4%/yr. That's ABOVE its 3.0% inflation target. Brazil’s M4 is growing at 9.4%/yr. That is ABOVE Hanke’s Golden Growth Rate of 7.1%/yr, a rate consistent with hitting its 3.0%/yr inflation target. INFLATION STORY = A MONEY SUPPLY STORY....
The USD/CHF pair slipped below its 100‑hour and 200‑hour moving averages, turning the short‑term bias bearish. During the Asian‑Pacific session the price briefly crossed the 200‑hour MA but stalled in a resistance zone between 0.7785 and 0.7793, allowing sellers to...
Sen. Thom Tillis (R-N.C.) said Tuesday he was hopeful that issues surrounding the Federal Reserve would be resolved, allowing Kevin Warsh’s nomination as central bank chair to move forward. https://t.co/7hUfth4Lf9
Not an overly active global macro calendar for tomorrow, but an important one. Top of the list is the February #CPI release. Will also watch that US monthly budget statement and 10-year t-note sale. Japan has some worthy data as well...
Bloomberg Index Services announced that its Bloomberg FX Fixings (BFIX) benchmark will incorporate transaction data from Euronext FX’s spot foreign‑exchange and precious‑metals markets. The addition expands BFIX’s data pool, aiming to enhance the benchmark’s robustness, transparency, and representativeness across global currency...
Argentina’s inflation comes in at a RED HOT 32.4%/yr. Argentina’s money supply (M3) is growing at 38.7%/yr. That's WELL ABOVE Hanke's Golden Growth Rate of 14.8%/yr, a rate consistent with hitting its de facto 10%/yr inflation target. INFLATION = PRES. MILEI'S ACHILLES...
Japanese Yen Short-term Outlook: USD/JPY Three-Week Surge Stalls – Breakdown Risk Builds https://t.co/Jpdp8iqepv $USDJPY Daily & 240min Charts https://t.co/bYSgW6uDag
The U.S. dollar showed little movement against the euro and yen while slipping slightly versus the pound after yesterday's volatility. Crude oil traded above the $90 psychological barrier, signaling continued bullish pressure. U.S. Treasury yields edged lower, with the 2‑year...
Trade US CPI LIVE tomorrow with Boris and Sam starting at 8AM ET / 12 GMT @fxflow They'll be hunting for opportunities in NQ, Gold and Forex https://t.co/9c2DFZTDGK
British Pound Forecast: GBP/USD Three-Day Rally Tests March Range High- Breakout Risk Builds https://t.co/W09S823voH $GBPUSD Weekly Chart https://t.co/KXMx8hxaQR
Denis Beau highlighted that France and the euro area have remained surprisingly resilient despite a cascade of shocks, including the Covid‑19 pandemic, the war in Ukraine, and heightened trade tensions. Inflation has dropped sharply, reaching 1.7 % in January and nearing...
On this week's Hanke's #CurrencyWatchlist, the Venezuelan bolivar ranks as the WORLD'S WORST currency. The bolivar has depreciated by 87% against the USD over the past year. VENEZUELA'S PATH TO RECOVERY = REPLACING THE BOLIVAR WITH THE DOLLAR. https://t.co/rbalL5aTfh
The Dollar stallout around 99.50 aligned to channel, some Fib standing and of course the curb on severe risk aversion around oil prices. That said, not a lot of pullback in the softened rate cut expectations around the FOMC's 2026...
Michele Bullock, the Reserve Bank of Australia governor, outlined why the Board unanimously raised the cash rate in February. She highlighted that inflationary pressures have intensified since mid‑2022, driven by capacity constraints and a still‑tight labour market. Underlying price growth...
Short video update on the $GBPUSD levels British Pound Rally Faces Major Resistance Into CPI Data https://t.co/JFEq01EOzu
Sarah Hunter, speaking at a Norway conference, outlined the outcomes of the 2022‑23 Reserve Bank of Australia (RBA) review and the subsequent refinements to its dual mandate. The review praised three decades of strong economic performance under flexible inflation targeting...
Ryozo Himino delivered a speech in Wakayama outlining Japan’s macro‑economic landscape through a detailed AD‑AS diagram. He organized endogenous variables in a circular layout, positioning stable exogenous factors at the core and short‑lived variables on the periphery. The presentation linked...
The European System of Central Banks has launched Phase III of an EU‑financed technical cooperation programme to strengthen central bank capacities in the Western Balkans. Hosted by Banca d’Italia, the initiative builds on two successful phases that delivered training, internships and...
Europe's energy vulnerability is contributing to the euro having a worse war than its peers, writes @marcusashworth https://t.co/D2PXb56w3z via @opinion https://t.co/aIh2l1QXUy
The Indian rupee rebounded from its all‑time low, trading at 92.14 per U.S. dollar after a 7‑paise gain in early trade. The rally was sparked by a sharp drop in global oil prices following President Donald Trump’s comments that the...
The U.S. dollar slipped after President Donald Trump declared the Iran conflict "very complete," prompting a sharp retreat in oil prices. Brent crude fell to $92.46 a barrel, down from Monday's $120 peak, easing pressure on risk‑sensitive currencies such as...
A different cut of the same idea, using options prices that reference 3-month SOFR via the Atlanta Fed's tracker In the one week between Feb. 27 (the day before the first strikes on Iran) and Mar. 6, the probability of at...
The USD/JPY pair surged earlier today, testing the 158.89 resistance that halted rallies on Jan. 15 and Jan. 22. Sellers stepped in, pushing the pair down to a low of 157.96, now hovering near the 157.65‑157.97 swing zone. A decisive break below...
The GBPUSD pair fell sharply early, slipping below the 1.3298‑1.3305 swing area and touching a low of 1.3282 before buyers pushed it back above the 100‑hour moving average at 1.3347. Improved risk sentiment—driven by lower oil prices, falling yields and...
Crude oil slipped below $100 as speculation grew that G7 ministers may tap strategic reserves, calming inflation worries. U.S. 10‑year Treasury yields hovered near 4.135%, barely up, while equities modestly recovered from recent lows. The euro‑dollar pair rose to an...
USD stablecoins guarantee a digital euro; now we have even more proof of this from Spain: “Europe needs a sovereign payment architecture,” and “the noticeable increase in US stablecoin-based financial intermediation increases the urgency.” Spain Pushes for 2028 Launch of...
The Indian rupee fell to a record‑closing 92.35 per dollar, cushioning domestic bullion prices despite a global gold slump. Spot gold in the United States dropped 1.2 % to $5,098 an ounce, while Indian spot gold slipped only ₹77 to ₹158,674...
European Central Bank President Christine Lagarde warned that Europe’s “limited responsibility” fiscal framework must be abandoned to protect prosperity and sovereignty. She made the remarks at an informal European Council meeting and the Munich Security Conference, calling for deeper fiscal...
The United States‑Israeli war on Iran has driven the Indonesian rupiah to Rp 17,009 per dollar, flirting with its 1997‑1998 crisis low. Bloomberg data show the currency briefly breaching the Rp 17,000 psychological barrier before settling near Rp 16,950. The conflict has also...
The U.S. dollar slipped slightly against the Canadian loonie, while remaining stronger versus most other major currencies. USDCAD found a low of 1.35242, testing a narrow support band between 1.35219 and 1.35316 before rebounding toward the 200‑bar moving average near...
Macro: USD & yields up; oil spike lifts risk‑off. Key: $5000 sup, $5150–$5200 res. Risks: Middle East safe‑haven vs dollar strength. Trade: Buy on decisive close >$5200. — Viktor Kopylov, PhD, CFA More insights: t.me/si14Kopylov
On central banks: Judging from the shift in market probabilities of interest rate actions, the markets now believe that single-mandate central banks (that is, price stability), such as the Bank of England and the European Central Bank, are in no mood...
The South African rand weakened to below R16.90 per US dollar, its lowest level since mid‑December, as oil prices surged more than 25% amid the expanding US‑Israeli conflict with Iran. Higher crude costs and heightened global risk aversion pressured the...
Italy’s Giorgetti cautions the ECB against the temptation of raising interest rates https://t.co/CasNsOy0KU via @Alemrome https://t.co/z3ATeFnSqp
In the last two trading days, the Brazilian Real has outperformed every other EM currency. This parallels price action after Russia invaded Ukraine. The same terms of trade shock that took $/BRL to 4.50 then is happening again now. Prime...
China’s inflation rate comes in at 1.3%/yr in February, BELOW its 2% target. China’s money supply (M2) is growing at 9.0%/yr, BELOW Hanke's Golden Growth Rate of 10.0%/yr, a rate consistent with hitting its inflation target of 2%/yr. THE INFLATION STORY =...
Market expectations of a June rate cut from the Fed have fallen to around 40%, close to their lowest levels in months following the run-up in oil prices, according to CME Group https://t.co/1DRbhts0Fk
Energy shock rewrites the ECB’s rate path as traders bet on hikes https://t.co/PhHe7FAJb5 via @highisland @greg_ritchie https://t.co/FvJg4WW5Ei
10y UST yield (blue, RS1) USDJPY * oil (red, LS) USDCNY * oil (green, RS2) Since Japan lifted YCC on 10y JGBs 👇 "Iran doesn't have to beat the US military; it just has to beat the UST market" -Title of 3/3/26...
Compared to the 2022 Russia-Ukraine invasion, this Iran war has produced 2x the move in oil, but only 1/2 the move in DXY. This is exactly what I'm talking about playing out - the dollar is structurally challenged. https://t.co/H1VIqKNbr7
The Dollar (blue) and rate differentials (black) are massively diverging. When the Strait of Hormuz reopens - even if only a little bit - we'll see a very large drop in the Dollar. We're still very much in a regime...
The SNB must be in the market ‘right now’ to weaken the Swiss franc, Sarasin’s Junius says https://t.co/0XhL08pNpx via @bbenrath https://t.co/IVfxoI9Dv0
put it this way, if this situation last long enough for central banks to hike, they'll end up hiking into a recession
Reports G7 will discuss coordinated release of strategic reserves is helping to stem the worst of the markets' reaction to the weekend developments. Still, USD is mostly firmer, rates higher, and equities lower. See https://t.co/4OVnPnHNHB https://t.co/PN5lizMKsV
Central banks have overshot their inflation targets for FIVE YEARS. This war threatens to make that six. If you think they are just gonna cut rates anyway, I dunno what to tell you. Minimum - rate cuts are postponed.
