The dollar’s recent rally has landed it in the crosshairs of Chinese and Japanese central banks. Overnight the People’s Bank of China verbally warned speculators against ‘one-sided moves’ and the Bank of Japan’s Governor Ueda hinted at the possibility of ending its super-easy monetary policy of negative interest rates.
The USD has gained 7.39% vs. CNY since late January, lifting USD/CNY to 7.3498, the pair’s highest mark since December 2007. And the USD/JPY is +11.21% since January.
The USD is lower today against all majors following the comments from Asia, notably: -0.99% vs. AUD, -0.94% vs. JPY, -0.71% vs. NZD, -0.77% vs. CNH, and -0.51% vs. GBP. The U.S. Dollar Index is -0.43%, retreating from its highest weekly close (105.09) since the week ending February 24th.
USD/MXN is -0.40% today but is still trading between the high/low ranges from the last four days.
U.S. Treasury yields are higher in the far tenors and mixed in the 1-month to 3-year tenors.
Global equities are starting the week strong with most major indexes solidly in the green: S&P500 futures +0.57% and Nasdaq100 futures up 0.85%.
Economic data to watch for this week includes Wednesday’s CPI and Thursday’s PPI.
