Dollar Bears Taking The Day Off?

2025-07-02 07:42:00 ET

Overview

The dollar's latest leg down began with the President Trump's heightened attacks on the Federal Reserve's conduct of US monetary policy on June 23. That move may be over. Perhaps helped by stronger than expected data yesterday and the rise in US rates. US rates have edged up further today, and the greenback is firmer against the G10 currencies. In a firmer US dollar environment, the Canadian dollar typically outperforms on the crosses and today is no exception. The Canadian dollar is off marginally. On the other hand, the yen is the weakest, off around 0.50%. Trump's protest that Japan does not buy rice from the US seems factually confused, but the end of the hiatus from the reciprocal tariffs is a week away and investors are on edge. Most emerging market currencies are also softer today, but foreign equity purchases and dollar sales by Taiwan exports saw the Taiwanese dollar surge. The central bank may have moved to cap its gains. The opposite took place in Hong Kong, where the HKMA intervened to cap the US dollar....

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