The report highlights the continued outperformance of the USD against the EUR and AUD, driven by diverging macro conditions and interest rate differentials. It also monitors Japanese official rhetoric regarding potential FX intervention amidst 40-year lows for the JPY.
Key Takeaways
- 1.The USD continues to outperform while the EUR is pressured by divergent macro outlooks between the Eurozone and the US.
- 2.The MoF maintains significant capacity to intervene in FX markets, though political sensitivity with the US regarding UST yields may constrain action.
- 3.AUD/USD is under significant downward pressure, breaching the 0.70 support level amid weak commodity prices and higher US Treasury yields.
Table of Contents
- Asia overnight
- EUR/USD: Pondering Modest Improvements
- JPY: look who's talking
- Latest publications
- Overnight returns (%, vs USD)
- 1M implied volatility daily change (net. vs USD)
- AUD: under pressure
- Open trade recommendations
- Key events
- FX Research advanced tools
- Red Mount Analytics
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Authors
Valentin MarinovDavid ForresterAlexandre Dolci
Securities
EURUSDUSDJPYAUDUSD
Themes
De-dollarisationFX Intervention
Regions
Asia PacificEuropeUnited StatesJapanAustralia