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EMERGING MARKETS: US Dollar Sees Sharp Two-Way Swings Post Mixed US Data

EMERGING MARKETS
BulletEM BulletEmerging Market News
  • The greenback trades close to unchanged following the US data releases, with the small upside surprises for US inflation data appearing to then be superseded by the large uptick in initial jobless claims, potentially countering the more stable narrative for the US jobs market following last week’s payrolls report.
  • In G10, we had a quick 120 point range for USDJPY with the immediate pop to 149.50 being quickly sold into and spot briefly trading down as low as 148.30. USDMXN had little reaction to the data, however in similar vein, the pair briefly extended to a 19.4185 low amid the lower US yields before recovering.
  • Strong supercore inflation data is likely limiting any downside momentum for the dollar/yields at this juncture, with markets likely to position themselves firmly towards a 25bp cut at the November FOMC meeting.
  • Weakness in equities in recent trade is also lending support to the greenback.
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  • The greenback trades close to unchanged following the US data releases, with the small upside surprises for US inflation data appearing to then be superseded by the large uptick in initial jobless claims, potentially countering the more stable narrative for the US jobs market following last week’s payrolls report.
  • In G10, we had a quick 120 point range for USDJPY with the immediate pop to 149.50 being quickly sold into and spot briefly trading down as low as 148.30. USDMXN had little reaction to the data, however in similar vein, the pair briefly extended to a 19.4185 low amid the lower US yields before recovering.
  • Strong supercore inflation data is likely limiting any downside momentum for the dollar/yields at this juncture, with markets likely to position themselves firmly towards a 25bp cut at the November FOMC meeting.
  • Weakness in equities in recent trade is also lending support to the greenback.