U.S. Dollar tumbles, close to its worst since May
The U.S. Dollar is trading in mostly weaker ranges as markets digest turbulence across the treasury bonds market and a possible FX intervention operation to help the weakening Japanese Yen.
Markets seem to be all over the place as the Buck seems to be taking the hit following a short period of recovery. All across the board, USD value seems to be deteriorating as the Bloomberg Dollar Spot Index is nearing its lowest point since mid-May. Once more, it looks like there was a coordinated effort to lift the Japanese Yen, making traders wonder how much more aid will be needed to steady the currency.
Domestically, investors and economists are mostly interested in what will be the reaction tomorrow once Non-Farm Payrolls and the Employment Situation, measuring everything from Unemployment Rate to wage growth, are released. Later this morning at 9:45AM we will get S&P Global Composite Purchasing Managers Index for August. Meanwhile, the we will watch closely for breaking news on the U.S.-Iran conflict, which has heated up in the last few days as surrounding nations grow worried about prolonging the intense strikes against their assets.
What to Watch This Week…
- US Nonfarm Payrolls, Friday 8:30AM
- USA Online is always open
The complete Economic Calendar can be found here.
JPY
The Japanese Yen advanced by 1.7% overnight as traders increased their bets that the Bank of Japan will be lifting interest rate hikes when they meet on September 18th. One concern for Yen bulls is that there may be too much intervention risk and without clarity or details about the timing JPY could flounder. Markets continue to question the long-term effectiveness of the U.S. interference while hoping that the currency can earn some merit based on fundamentals. We shall see if another round is planned as well as explained.
MXN
The Mexican Peso is the one exception as it is down against the Buck while all other peers rise. Without any economic indicators to point to as catalysts for its downward turn, most analysts are looking forward to next week when Vehicle Production, Consumer Price Index and ever regional reports assessed by the central bank, Banxico. Although the “Super Peso” run may have hit the brakes, the value currently stands only about half of a percent away from its strongest level since May of 2024, which was last touched on August 21st.