AFMC - Japanese Officials Weigh In And Help Yen Stabilize While Euro And Sterling Extend Losses

2024-02-14 07:30:00 ET

Summary

• The dollar was driven higher, and it is stabilizing today, though the euro and sterling extended their losses, most of the other G10 currencies did not.
• After the yen's six-week slide did not elicit a response from Japanese officials, yesterday's drop did, and this may have helped steady the exchange rate today.
• After the sharp US equity losses yesterday, Asia Pacific markets followed suit.
• The yellow metal has recovered back into yesterday's range.

Overview

The market's reaction to the firmer than expected January CPI seems exaggerated. We do not think it was the game-changer for the Federal Reserve that the market seemed to think. The dollar was driven higher, and it is stabilizing today, though the euro and sterling extended their losses, most of the other G10 currencies did not.

After the yen's six-week slide did not elicit a response from Japanese officials, yesterday's drop did, and this may have helped steady the exchange rate today. However, the dollar's advance against the yen does not seem over. Emerging market currencies are mostly heavier. The Mexican peso, which was the worst performer yesterday is the best today with a minor gain of about 0.20%....

For further details see: