Dollar Down as China Limits Treasury Buying

The United States Dollar is trading in weaker ranges against its G10 peers this morning following a report that regulators have directed Chinese financial institutions to limit their purchases of US Treasuries, and for those with significant holdings to pare their positions. The announcement revives fears regarding the safe-haven status of US assets, which is keeping the Dollar under pressure, but Traders are debating the significance of the announcement due to the fact that China has been scaling back their exposure to US debt for years, and more than 70% of sovereign bond allocations are in US treasuries.

Traders remain focused on significant data releases expected later this week, the most notable of which are US employment and inflation data on Wednesday and Friday respectively. Some other important releases to keep an eye on include UK GDP on Thursday, alongside Swiss CPI and EuroZone GDP on Friday.

What to Watch This Week…

• US Nonfarm Payrolls Wednesday Feb 11th
• Monex USA Online is always open

The complete Economic Calendar can be found here.

GBP ⇑

The British Pound is trading in stronger ranges against the Buck this morning following Prime Minister Keir Starmer’s statement that he regrets making the decision to appoint Peter Mendelson, who is currently embroiled in the release of the Epstein Files, as US ambassador. PM Starmer’s comments have given Traders the opportunity to take a breath, as his ouster, and the subsequent political instability, are no longer a foregone conclusion. Andy Burnham will need to wait a little bit longer to return to parliament.

JPY ⇑

The Japanese Yen is trading in stronger ranges against the Greenback this morning

following this weekend’s election, which saw Prime Minister Sanae Takaichi’s Liberal Democratic Party (LDP) secure a super majority in the lower house of the Diet. PM Takaichi also announced that she is looking to build trust with financial markets, which has further helped to stave off the expected depreciation of the Yen following the consolidation of the LDP’s power. As a result, the Yen appears to be stable for the time being but retains a focus on US economic data coming later this week.