The U.S. dollar is enjoying widespread strength to start the week.
Overview
The Bloomberg Dollar Index is up 0.4% and the greenback is in the green against all of its G10 rivals. As we approach the end of the month and end of the quarter in the coming days, we expect even more volatility throughout currency pairs.There is minimal fundamental data for traders to pick apart this morning. The Dallas Fed Manufacturing outlook is due out at 10:30 a.m. There are no Fed speakers on today’s docket. President Joe Biden will announce his budget for fiscal year 2023 at 2:45 p.m.
What to Watch Today…
- No major economic events scheduled for today
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JPY
The Japanese yen was the biggest loser overnight. The yen lost as much as 2.5% before paring some of those losses. The yen is still down 1.5% from Friday’s close and is trading at its weakest level since the summer of 2015. The move was sparked by an announcement by the Bank of Japan that they offered to buy an unlimited amount of 10-year government bonds over the next three days. The move is monetary policy easing and comes as many other major central banks are tightening and raising rates.
GBP
The British pound is under pressure this morning following fairly dovish comments from Bank of England Governor Andrew Bailey. Bailey stated that the central bank softened its guidance on future interest rate hikes because of a high level of economic uncertainty. Bailey highlighted challenges such as rising energy prices and Russia’s invasion of Ukraine. While Bailey spoke, traders pulled back future interest rate expectations. Per Bloomberg, traders are now pricing 135 basis points of tightening compared to 145 basis points before Bailey spoke.
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