The US Dollar (USD) is weak and losing ground against all of the G10 currencies while showing marginal gains vs. MXN, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
USD weakens broadly on trade headlines
“The performance distribution of G10 FX is varied however, with notable strength in Europe and outperformance for SEK, CHF, NOK, and EUR—all up close to 1% on the day. JPY is a mid-performer with a gain of 0.7%, while NZD and CAD are up only 0.3% and GBP and AUD are up 0.2%. The focus is on trade, with USD weakness initially sparked by comments from President Trump as he spoke of setting unilateral tariffs and notifying major trading partners in two weeks, ahead of the July 9 deadline. A reminder that the US has only successfully concluded trade negotiations with the UK and is working on bilateral deals with Japan, South Korea, the EU, and India.”
“This latest round of USD weakness began on Wednesday, with the release of softer than expected US CPI that sparked an aggressive repricing of expectations for Fed easing. The latest USD-negative trade headlines have compounded a fundamentally-driven USD decline. In broader markets, the tone is one of risk aversion with a notable rollover in US equity futures as US yields extend their CPI-driven declines. The US 10Y yield is drifting back to the lower end of its 4.30-4.60% range from early May, while the German 10Y is breaking to fresh local lows under 2.50%.”
“In commodities, oil prices have found further support on the back of worrisome geopolitical developments and the US’ drawdown of non-essential embassy staff in Baghdad as a result of heightened security risks. Meanwhile, copper appears to be consolidating following its most recent bearish reversal and gold prices are finding renewed support on the back of both geopolitical and broadbased USD weakness. For Thursday’s NA session, the release of second-tier PPI and jobless claims is not likely to be market moving, and the upcoming Fed meeting leaves markets with no speakers ahead of next Wednesday’s decision.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
