How on earth can the Dollar be turned around? – SocGen

FXStreet Insights Team FXStreet

The bond market will go on dominating currency trends, Kit Juckes, Chief Global FX Strategist at Société Générale, reports.

Can USD/JPY be turned around without JGB yields rising?

The bond vigilantes remain firmly in control of the FX market, as well as all the others; while positioning can slow the Dollar down, it won’t justify a change in trend.

The sight of the BoJ verbally intervening to talk up the Yen, and buying JGBs to prevent yields rising, captures the heart of the problem.

If the Fed is committed to shrinking its balance sheet, and the BoJ is committed to capping yields, how on earth can the Dollar be turned around? Significantly stronger European data, or a huge BoJ pivot, could trigger Dollar weakness but otherwise, we’re watching the Treasury market to see where supply/demand find some balance.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD breaks 0.7000 as RBA inflation warning fuels two-week high

The Australian Dollar registers solid gains versus the Greenback, climbing above 0.7000 and hitting a two-week high of 0.7017 as broad US Dollar weakness pushes AUD/USD above 0.7000 amid a light economic docket in both Australia and the US.

USD/JPY flatlines near 158.50 as markets seek direction

USD/JPY steadies around 158.50 in the Asian trading hours on Tuesday. Traders prefer to wait on the sidelines ahead of Japan’s National Consumer Price Index inflation data later on Friday. Meanwhile, elevated US bond yields provide some support to the US Dollar against the Japanese Yen.

Gold just failed at $4,150. This is the next stop

Gold prices trade without a clear direction on Tuesday, hovering around the $4,170 region per troy ounce and still struggling to regain upside traction following Monday’s pullback. In the meantime, lower US Treasury yields and a marked pullback in the US Dollar come in tandem with the yellow metal’s price action.

Bitcoin resumes Nasdaq correlation as macro pressures threaten $82,500 support

Bitcoin's (BTC) correlation with the Nasdaq is rising again after last week's decline alongside tech stocks, even as macro pressures place the $82,500 support at risk. In a report on Tuesday, K33 Research highlighted that Bitcoin has resumed its correlation with the tech-heavy Nasdaq after last week's price movements.

SpaceX's earnings don't matter. What they unlock does

The Elon Musk-founded SpaceX reports third-quarter results after Tuesday's session. The figure that decides the next month for the stock isn't in them. On Thursday, the second full trading day after the release, up to 1.3 billion shares held by employees and early investors become eligible for sale.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.