Free Trial
WTI TECHS

(X2) Bear Cycle Still In Play

BUNDS

Heavy supply this morning

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

Greenback Plummets Following Lower July US CPI

FOREX
  • The USD index is seen 1.1% lower on Wednesday following the negative surprise for July US inflation data. The month-on-month headline unrounded was negative for the first time since May 2020 and the M/m core unrounded was the lowest since Sept 2021.
  • The kneejerk reaction was a significantly lower greenback across the board, however, the main beneficiary in the immediate aftermath was the Japanese Yen. USDJPY crashed 230 pips to 132.69 shortly after the release and despite a sharp pullback to 133.30, pressure on the pair extended over the next few hours all the way down to 132.03, comfortably below the lows registered prior to Friday’s jobs numbers.
  • In similar vein, EURUSD saw immediately strength and finally broke out of the 1.0100-1.0300 range it had been consolidating in for the past sixteen sessions. Key channel top resistance was briefly breached above 1.0352 coinciding with the horizontal breakdown area between 1.0341/50.
  • Unyielding support for US equity benchmarks continued to underpin the likes of AUD and NZD who look set to register gains of close to 2% as we approach the APAC crossover.
  • Worth noting there has been a decent bounce in the greenback in late trade as Fed rhetoric from both Evans and Kashkari hinted that today’s data should not alter their expected trajectories for rates. USDJPY relief rally was supported by US 10-yr yields rising back to pre-CPI announcement levels with the curve remaining steeper. The pair now roughly a full point off the day’s lows at 132.03.
  • Similar EURUSD selling sees the pair trade back to the 1.0300 mark, however, with major equities remaining close to the highs, there has been less of a pullback in antipodean FX and CAD that remain closer to their best levels of the day against the greenback.
  • Bank Holiday in Japan on Thursday with little data due throughout the APAC session. Less significant PPI and jobless claims highlight the US docket tomorrow.
313 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • The USD index is seen 1.1% lower on Wednesday following the negative surprise for July US inflation data. The month-on-month headline unrounded was negative for the first time since May 2020 and the M/m core unrounded was the lowest since Sept 2021.
  • The kneejerk reaction was a significantly lower greenback across the board, however, the main beneficiary in the immediate aftermath was the Japanese Yen. USDJPY crashed 230 pips to 132.69 shortly after the release and despite a sharp pullback to 133.30, pressure on the pair extended over the next few hours all the way down to 132.03, comfortably below the lows registered prior to Friday’s jobs numbers.
  • In similar vein, EURUSD saw immediately strength and finally broke out of the 1.0100-1.0300 range it had been consolidating in for the past sixteen sessions. Key channel top resistance was briefly breached above 1.0352 coinciding with the horizontal breakdown area between 1.0341/50.
  • Unyielding support for US equity benchmarks continued to underpin the likes of AUD and NZD who look set to register gains of close to 2% as we approach the APAC crossover.
  • Worth noting there has been a decent bounce in the greenback in late trade as Fed rhetoric from both Evans and Kashkari hinted that today’s data should not alter their expected trajectories for rates. USDJPY relief rally was supported by US 10-yr yields rising back to pre-CPI announcement levels with the curve remaining steeper. The pair now roughly a full point off the day’s lows at 132.03.
  • Similar EURUSD selling sees the pair trade back to the 1.0300 mark, however, with major equities remaining close to the highs, there has been less of a pullback in antipodean FX and CAD that remain closer to their best levels of the day against the greenback.
  • Bank Holiday in Japan on Thursday with little data due throughout the APAC session. Less significant PPI and jobless claims highlight the US docket tomorrow.