ACTV - Self-Inflicted Wounds In Europe And Japan Help The Greenback Shrug Off The Drag Of Lower Rates
2024-06-14 07:15:00 ET
Summary
- What makes the dollar's performance stand out is that it is taking place as US rates have fallen.
- The euro has been sold to almost $1.0670 and sterling has been pushed below $1.2700.
- In Japan, the BOJ made no change in its bond purchases, disappointing many, though Governor Ueda kept the door open to a move next month on rates and bond purchases.
Overview
The dollar ([[DXY]], [[USDOLLAR]]) is bid. What makes its performance stand out is that it is taking place as US rates have fallen. The US 10-year yield ( US10Y ) is near 4.20%, the lowest in more than two months. The two-year yield is near 4.67%. It has fallen every session this week, for a cumulative decline of more than 20 bps. It is not so much that constructive developments took weeks, but that Europe and Japan are suffering from self-inflicted injury. Macron's call for snap elections in France undermined sentiment, and the latest developments warn that his party and allies could come in third place in the first round of voting. In the UK, it is possible that the Tories slip into third place too. In Japan, the BOJ made no change in its bond purchases, disappointing many, though Governor Ueda kept the door open to a move next month on rates and bond purchases. The euro has been sold to almost $1.0670 and sterling has been pushed below $1.2700. The dollar briefly was bid above JPY158 for the first time since the late April intervention, but has now a little above JPY157. Only the Swiss franc among the G10 currencies is holding its own against the surging greenback....
Self-Inflicted Wounds In Europe And Japan Help The Greenback Shrug Off The Drag Of Lower Rates