Daily Market Update

Dollar maintains dominance, Yen further drops

April 02, 2024

The U.S. Dollar is trading around its strongest level overall in six weeks as markets prepare for the likelihood of a longer wait for Federal Reserve cuts.


Indeed, following a month of downs and then ups, the Buck has improved across the board to start April with a sense that interest rates will stay higher for longer. Ultimately, this bodes quite well for the Buck as other central banks around the globe face the need to stimulate and thus are making cuts to borrowing costs.

We will get a look at February data in the form of Durable Goods Orders as well as Factory Orders at 10 AM. Anything suggesting an ongoing expanding economy could push Buck further upward. Fed Chairman Jerome Powell is likely to move the needle tomorrow as he gives a speech on the economic outlook at Stanford University. It will also be important to monitor geopolitical headlines after an Israeli airstrike on the Iranian embassy in Syria. The incident has already caused oil prices to climb. Naturally, more chaos could further solidify the Buck’s resurgence.

What to Watch Today…

  • US Nonfarm Payrolls, Friday 8:30 AM
  • Euro-Zone CPI Wednesday
  • Monex USA Online is always open.

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The Euro fell to its weakest point since mid-February yesterday as the chances of a Fed interest-rate cut for June dropped to almost a coin flip. In contrast, the European Central Bank has more evidence of a need to stimulate the European economy after dragging following post-pandemic woes. Nevertheless, some hope is in the air as March’s Manufacturing Purchasing Managers Index reading came in more optimistic than expected. Inflation tomorrow will be gauged with Consumer Price Index figures for March, while Producer Price Index and a more comprehensive glance at PMIs come out Wednesday. These data points can aid in preventing further dollar appreciation if they exude improvement for the Eurozone.


The Japanese Yen keeps testing new lows as it reaches yet another record level that could trigger FX intervention from the Bank of Japan and financial authorities. While it is an expensive and arduous monetary endeavor, the BOJ has officials already commenting on the need to act soon. Any decision from the BOJ to intervene will likely make the Buck even stronger. We will not know until it happens, but it is safe to foresee this fosters fresh ground for volatility to increase.


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