AFMC - Sterling Moves Back Into Previous Trading Range But Will It Hold?

2024-02-07 06:40:00 ET

Summary

• The dollar is trading with a slightly heavier bias.
• Sterling has moved back into the range that dominated since the middle of last December until the start of this week.
• The biggest drop in the US 10-year yield since last week's FOMC meeting (~7 bp) dragged the dollar lower against the yen yesterday.

Overview

The dollar is trading with a slightly heavier bias as some of its recent gains are pared. Sterling has moved back into the $1.26-$1.28 trading range that dominated since the middle of last December until the start of this week. The euro is also trading a little firmer despite another large drop in German industrial output (-1.6%).

The Japanese yen, Swiss franc, and Norwegian krone are the notable exceptions with a softer profile. Emerging market currencies are mostly firmer. Yet, the lower yielding G10 currencies are trading softer, among emerging market currencies today, the high yielding ones are trading lower. These include the Turkish lira, South African rand, and the Hungarian forint....

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