The Japanese yen traded around 145 per dollar on Friday, close to a 24-year low of 145.9 hit last month despite efforts by the Japanese government to stem its slide. Japanese Prime Minister Fumio Kishida warned investors against betting on a weaker yen, saying sharp, one-sided yen declines are “undesirable” and that the currency intervention conducted last month reflected the government’s view that it cannot turn a blind eye to “repeated, excessive volatility” driven by market speculation. Latest data showed that Japan’s foreign exchange reserves dropped by a record in September following the government’s first currency intervention in 24 years, with the Finance Ministry disclosing that it spent up to a record of  ¥2.8 trillion in its intervention efforts last month. Japan’s currency has depreciated steadily throughout the year on widening policy divergence, as the Bank of Japan committed to ultra-easy policies while the US Federal Reserve aggressively raised interest rates.

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Yen Remains Weak Despite Kishida Warning

The Australian dollar held its recent decline to around $0.64 on Friday, falling back toward its lowest levels in over two years on expectations that the US Federal Reserve will push ahead with its aggressive tightening plans, fueling fears about a global recession. The aussie also weakened this week after the Reserve Bank of Australia delivered a smaller-than-expected interest rate hike. The RBA raised the official cash rate by 25 points to 2.6% on Oct. 4th, defying market expectations for a bigger 50 basis point increase, but left the door open for further tightening ahead. The central bank has now lifted rates for six straight meetings by an aggregate of 250 basis points, and said that the cash rate had been raised significantly in a short period of time so it decided to slow the pace of increases

Aussie Holds Decline on Fed Rate Hike Bets

The New Zealand dollar weakened past $0.57 on Friday, sliding back toward its lowest levels in over two years on expectations that the US Federal Reserve will push ahead with its aggressive tightening plans, fueling fears about a global recession. The kiwi lost all the gains made earlier in the week following the hawkish half-percentage point rate hike from the Reserve Bank of New Zealand, which also considered a bigger 75 basis point increase and signaled further tightening ahead as it struggles to bring down high inflation. The move countered speculations for a dovish turn by major central banks and stood in stark contrast to the Reserve Bank of Australia which surprised markets with a smaller-than-expected rate increase. Still, New Zealand’s currency remains up about 1% this week and is set to snap seven straight weeks of losses.

NZ Dollar Weakens on Fed Rate Hike Bets

The Indonesian rupiah weakened below 15,235 against the US dollar after appreciating above 15,200 earlier in the week, amid reports that the country's foreign exchange reserves dropped to their lowest in almost 2-1/2 years of USD 130.8 billion by the end of September as Bank Indonesia continues its efforts to stabilize the currency in the face of global financial market uncertainty. The central bank recently said that inflation by the year-end will hit above 6% and core inflation at 4.6% following a sharp fuel price hike in early September. Latest data showed that consumer prices in the month rose by 5.95% yoy, the most since October 2015, while core consumer prices were at a 3-year top of 3.21%. Meantime, the dollar index maintained its upside momentum as several Fed officials reinforced the view that the central bank is nowhere near done with its tightening cycle to bring down US inflation.

Indonesian Rupiah Softens

USDINR increased to an all-time high of 82.33

Indian Rupee Hits All-time Low

The dollar index held its recent advance to above 112 on Friday, underpinned by a drumbeat of hawkish remarks from Federal Reserve officials, while investors look ahead to the pivotal monthly jobs report that could guide the central bank’s monetary decision in November. The nonfarm payrolls report due later in the global day is expected to show that the US economy added 250,000 jobs in September, and a surprise to the upside would reinforce bets for further monetary tightening and drive another dollar rally. Cleveland Fed Bank President Loretta Mester said the Fed has to be “singularly focused on inflation,” echoing remarks from other central bank officials who sounded unequivocally committed to bringing down inflation with more rate hikes, even at the cost of higher unemployment and weaker growth. The dollar held its gains against the euro, the sterling, the yen and antipodean currencies, while rebounding sharply against Asian currencies.

Dollar Holds Advance Ahead of Jobs Report

USDTRY increased to an all-time high of 18.856

Turkish Lira Hits All-time Low

The dollar index moved toward the 112 mark, rebounding further from a two-week low of around 110 as investors adjusted their portfolios for an aggressive tightening of monetary policy. While signs that the job market is cooling sparked some hopes for a policy pivot, recent hawkish remarks from several policymakers suggest the opposite. Minneapolis Fed President Neel Kashkari was the latest policymaker to signal that further rate hikes are needed to bring down inflation to its 2% target. Now, monthly non-farm payrolls and unemployment rate figures, due on Friday, will be at the top of markets' radar for clues about the central bank rate path.

Dollar Extends Upside Momentum

The euro continued to weaken to $0.98 in the first week of October, moving toward a 20-year low of $0.95 hit on September 27th as investors doubt the ECB will be able to combat inflation while protecting an economy at increasing risk of recession. Policymakers pledged to keep raising rates even if economic growth gets compromised, the latest ECB meeting minutes showed. Markets expect the central bank to hike rates by large increments in the October and December meeting, but the pace of the rate-hike cycle next year could slow. The latest economic data showed retail sales in the bloc fell for the third straight month in August and updated PMIs indicated falling GDP, with the rate of decline gathering momentum over the third quarter.

Euro Continues to Depreciate

USDINR increased to an all-time high of 82.008

The Indian rupee weakened again toward 82 per dollar, at risk of further depreciation to new record lows, weighed down by the delay in the inclusion of local bonds into J.P. Morgan’s influential emerging market bond index, which was expected to attract up to $30 billion of foreign capital. The rupee also declined on rising oil prices after OPEC+ agreed to a large output cut, forcing Indian buyers to purchase even more dollars to settle oil imports, putting downward pressure on the local currency. Meanwhile, the Reserve Bank of India reportedly sold dollars via state-run banks on Monday to support the rupee, ramping up intervention efforts as it defends the 82 level, with data pointing to at least $100 billion being drawn so far from foreign currency reserves. The RBI also delivered a 50 basis point rate hike at its latest meeting to rein in surging inflation, having now lifted the repo rate by a total of 190 basis point since May, though it had little impact on its weakening currency.

Indian Rupee Weakens on Bond Inclusion Delay

Asian currencies mostly gained on Thursday as risk sentiment improved, while investors await the monthly US jobs report that could offer fresh clues on the likely path for Federal Reserve monetary tightening. The South Korean won led the advance, jumping nearly 1% toward 1,400 per dollar as the Bank of Korea said it expects inflation to stay elevated for a considerable period. The Thai baht also rose about 0.4% to around 37.2 per dollar, recovering further from 16-year lows. Elsewhere, the Singaporean dollar, Taiwanese dollar, Indonesian rupiah and Philippine peso held recent gains, while the Malaysian ringgit traded flat ahead of a budget announcement and speculation of a snap election. Meanwhile, investors remained cautious as US policymakers signaled strong commitment in bringing inflation down with aggressive interest rate hikes, while a highly uncertain global economic outlook could drive further depreciation among Asian currencies.

Asian Currencies Gain as Sentiment Improves

The New Zealand dollar rallied 1% to around $0.58 on Thursday, hitting its highest levels in almost two weeks, lifted by a hawkish half-percentage point rate hike from the Reserve Bank of New Zealand which also considered a bigger 75 basis point move. This countered speculations for a dovish turn by major central banks and stood in stark contrast to the Reserve Bank of Australia which surprised markets with a smaller-than-expected rate increase. Analysts are also flagging upside risks to the RBNZ’s rates forecasts after it signaled further tightening ahead as it struggles to bring down high inflation. Meanwhile, the kiwi remains close to its lowest levels in over two years as a hawkish US Federal Reserve and a highly uncertain global economic outlook weighed on the currency.

New Zealand Dollar Jumps on Hawkish RBNZ

The dollar index traded around 111 in choppy trade on Thursday, holding onto gains from the previous session as better-than-expected US data and hawkish remarks from US policymakers supported the case for continued Federal Reserve monetary tightening. Markets digested an ADP report pointing to another robust private sector hiring and ISM Services PMI data that beat estimates, signaling that the US economy remains resilient and countering weak data from earlier this week. On the monetary policy front, Atlanta Fed Bank President Raphael Bostic said he favored raising rates to 4.5% by year-end or 125 basis points of additional tightening, while San Francisco Fed Bank President Mary Daly pushed back against speculations for a Fed pivot next year. Meanwhile, an improving risk sentiment on Thursday weighed on the dollar, with US futures, commodities and risk-sensitive currencies rising in early trade.

Dollar Holds Gains on Fed Rate Hike Bets

The Canadian dollar fell Wednesday after recovering from 52-week lows against the US Dollar, stabilizing around the 1.36 USD mark. Canadian yields have held below their June peaks as investors expect a less hawkish BoC as the economic situation worsens. Still, investors are digesting conflicting economic data as both the Canadian Manufacturing PMI and changes in Building Permits came in more expansionary than expected. Additionally, distressed debt levels remain subdued at 2011 levels suggesting that the Fed has more room to tighten and the global economy can undergo more pain.

Canadian Dollar Falls on Fears of Hawkish BoC

The dollar index extended gains and strengthened almost 1.5% to approach 112 on Wednesday, following a 1.5% loss the day before which was its biggest one-day drop in more than two years. The ISM Services PMI beat forecasts and the ADP report pointed to another robust job growth, helping to push back expectations the Fed will start slowing the pace of monetary tightening. The next big catalyst for markets will be the nonfarm payrolls report on Friday.

Dollar Approaches 112

The dollar index jumped almost 1% to 111 on Wednesday, following a 1.5% loss the day before which was its biggest one-day drop in more than two years. Bets the Fed will start slowing the pace of monetary tightening faded, with investors looking for further data to support a slowing economy. Still, the ADP report pointed into another direction to a robust job growth while the trade deficit continues to narrow in the US. Early in the week however, the JOLTS report showed a bigger-than-anticipated fall in the number of job openings while the ISM Manufacturing PMI slowed sharply. Traders now await the ISM Services PMI release later today but the next big catalyst will be the nonfarm payrolls report on Friday.

DXY Gains Nearly 1%

The Russian ruble depreciated to around $60, the lowest in two weeks, as investors worry that new sanctions could restrict access to foreign currency in Moscow. The European Union approved a new package of sanctions against Russia, including a price cap on Russian oil shipped to third countries and mechanisms to avoid circumvention of sanctions. The ruble recovered 60% since hitting a record-low of 150 in March, as strict capital controls and trade imbalances stabilized the ruble despite crashes in other Russian financial markets, as the Kremlin mobilized its population and moved to annex eastern regions of Ukraine. Higher commodity prices partially offset lower export volumes to keep revenues somewhat in check, while the plummet in imports due to sanctions limited Russian demand for foreign currencies. Also, monetary authorities mandated hefty fees and negative interest rates on currencies from “unfriendly" states.

Russian Ruble Weakens to 2-Week Low

The British pound weakened below $1.14 from a three-week high of $1.15, after PM Liz Truss said the Conservative party will always be the party of low taxes while markets that were hoping for more withdrawal on the tax-cutting policies. The sterling recovered from a record low of $1.03 hit on September 26th after finance minister Kwarteng said the government would not cut the top 45% rate of income tax for the biggest earners, reversing earlier pledges. On September 23rd, the government announced a mini-budget worth £45 billion by 2026-27 that included several tax cuts, making investors worry about the sustainability of the UK's debt levels.

Sterling Eases from 3-Week High

The euro held below $1 in October, not far from a 20-year low of $0.95 hit at the end of September, as investors doubt the ECB will be able to fight against inflation while protecting an economy at increasing risk of recession. The European Central Bank is expected to continue hiking interest rates by large increments in the coming months after the inflation rate in the Euro Area hit an all-time high of 10% in September, well above the central bank's target of 2%. Still, Bank of France Governor Francois Villeroy de Galhau urged caution about rising the deposit rate above 2% and called for a more flexible and possibly slower rate hike path in 2023. Also, signs that the US economy is cooling down, sparked bets for less aggressive tightening by the Federal Reserve, which in turn, led investors to reduce bids on ECB rate hikes. Meanwhile, updated PMI data showed business activity deteriorated for three straight months, indicating falling GDP.

Euro Set to Remain Weak

The South Korean won held its recent gains to trade around 1,415 per dollar in early October, as the Bank of Korea said it expects inflation to stay elevated at the 5-6% levels for a considerable period, with upside risks from surging import costs. Those comments came after data showed annual consumer prices in the country rose 5.6% in September, slowing for the second straight month and coming in below expectations. Meanwhile, the won remained close to its lowest levels since 2009 as rising interest rates, global recession fears and a weakening external demand weighed on its export-driven economy. A widening trade deficit also pressured the currency, which is likely to reach around $50 billion in 2022 due to soaring costs of energy and other commodities, the largest-ever trade gap since the series began in 1964.

S.Korean Won Holds Gains After Inflation Data

The Indonesian rupiah strengthened above 15,200 against the US dollar on Wednesday after briefly hitting below 15,310 the day before, amid reports that President Joko Widodo plans to declare the end of the COVID-19 pandemic soon. Local media said that the leader had ordered the health minister to start a consultation process with the WHO before the country could start taking the first step toward the move. Meantime, Bank Indonesia is predicted to pick up its tightening pace, lifting further its key interest rate likely from the current level of 4.25% to 4.75% or higher by the end of 2022, back to where it was before the pandemic. Recently, central bank governor Perry Warjiyo mentioned that BI would raise interest rates further, but its policy tightening would not be as aggressive as the US Federal Reserve. Meantime, the dollar index weakened below the 111 mark, as a batch of macroeconomic releases in the US drove investors to place bets that the Fed’s tightening path may slow.

Indonesian Rupiah Appreciates

The dollar index stabilized above 110 on Wednesday, supported by expectations that the Federal Reserve will push borrowing costs higher and keep interest rates at restrictive levels until inflation falls back down to its 2% target. Investors also heeded hawkish signals from the Reserve Bank of New Zealand, which countered dovish hints from the Reserve Bank of Australia and reminded markets that many central banks are still prioritizing the fight against inflation. Meanwhile, the dollar dropped nearly 2% in the previous two sessions as weak US economic data and Australia’s smaller-than-expected rate hike prompted bets that the US central bank will slow the pace of rate hikes. Haven demand for the dollar also eased in recent sessions as the UK government dialed back proposed policies that rattled financial markets, while analysts suggested that the US economy could withstand more tightening before getting into recessionary conditions.

Dollar Stabilizes as Hawkish Fed Supports

The New Zealand dollar nearly 1% above $0.575on Wednesday after the Reserve Bank of New Zealand raised its policy rate by 50 basis points to 3.5%, as widely expected. The RBNZ has now raised interest rates for eight consecutive meetings, having previously signaled that it wanted to get rates to a restrictive level of 4% before pausing.

NZ Dollar Jumps After RBNZ Decision

The dollar index weakened below the 111 mark, a level not seen in almost two weeks, on speculation that weaker-than-expected US economic data would temper the Federal Reserve’s aggressive tightening. The number of job openings in the US fell more than expected in August, signaling that tighter financial conditions could be cooling the job market. This data came a day after a gauge of US manufacturing from ISM showed activity declined to the lowest since May 2020. Meanwhile, Fed officials continue to advocate for further rate hikes. New York Fed Bank President John Williams said that while there are signs of cooling inflation, underlying price pressures remain elevated, reinforcing the case for further monetary tightening.

Dollar Weakens Below 111

The South Korean won was changing hands around the $1,425 mark, close to levels not seen since March 2009, as investors grew concerned about the performance of the export-driven economy amid mounting global headwinds. Weak export prospects, particularly those to China, the country's largest trade partner, are set to drag the South Korean economy. The country's trade deficit is likely to reach around $50 billion in 2022, the largest-ever trade gap since the series began in 1964, amid a global economic slowdown and soaring energy costs. This sharp depreciation of the won forced the Bank of Korea to sell record dollars in the last months to stem currency weakness that threatened to further fuel inflation.

South Korean Won Hovers Near 13-1/2-Year Low

The Indian Rupee strengthened to the 81.5 per USD level, rebounding slightly from the record-low of 81.7 from the end of September and tracking a broad appreciation for riskier currencies as a batch of concerning macroeconomic releases in the US drove investors to place bets that the Fed’s tightening path may slow. Still, the tightening outlook for the Reserve Bank of India remains lower than those of its US counterpart. The RBI raised its main repo rate by 50bps to 5.9% in its last meeting, adding to the 190bps in rate hikes so far this year, aiming to support the weakening domestic currency and curb inflation that stubbornly remains above the central bank’s upper target of 6%. While limiting the downturn, efforts to defend the rupee by the RBI failed to stop the currency’s broad depreciation, with data pointing to over USD 100 billion being drawn from the central bank’s foreign currency reserves.

Indian Rupee Rebounds Slightly

The South African rand was trading around 17.8 per USD, the highest since September 22nd, amid a softer dollar on expectations of moderating interest rate hikes by the Federal Reserve. Meanwhile, the South African Reserve Bank is due to raise another 25 basis points in November and either January or March before pausing at 6.75% for the remainder of next year. The central raised the key repo rate by 75 bps for a second straight meeting in September, to firmly re-anchor inflation expectations close to the 4.5% midpoint of its target range to achieve the inflation target in 2024.

South African Rand Firms

The dollar index retreated for a third day to near two-week lows of 111.2 on Tuesday on bets the Fed may slow the pace of future rate hikes, after fresh ISM Manufacturing PMI figures showed an unexpected slowdown in US factory growth. Money markets now expect the central bank to raise rates by 125bps by March, below 165bps seen last month. Meanwhile, Fed officials continue to advocate for further rate hikes. New York Fed Bank President John Williams said on Monday that while there are signs of cooling inflation, underlying price pressures remain elevated, reinforcing the case for further monetary tightening.

Dollar at 2-Week Lows

The euro appreciated towards $0.99 in October, moving further away from a 20-year low of $0.95 hit at the end of September. Investors bet the European Central Bank will continue to raise interest rates in the coming months after the inflation rate in the Euro Area hit an all-time high of 10% in September, well above the central bank's target of 2%. ECB President Lagarde recently said the central bank would keep tightening its monetary policy, even as the region faces an economic downturn, with several ECB members calling for another 75 basis point hike later this month. Elsewhere, weak US manufacturing data highlighted a looming global recession and reduced chances of a faster policy tightening by the US Federal Reserve.

BREAKING NEWS

05:50 · Oct 7

Currency

Yen Remains Weak Despite Kishida Warning

05:27 · Oct 7

Currency

Aussie Holds Decline on Fed Rate Hike Bets

05:23 · Oct 7

Currency

NZ Dollar Weakens on Fed Rate Hike Bets

04:00 · Oct 7

Currency

Indonesian Rupiah Softens

03:37 · Oct 7

Currency

Indian Rupee Hits All-time Low

03:23 · Oct 7

Currency

Dollar Holds Advance Ahead of Jobs Report

21:51 · Oct 6

Currency

Turkish Lira Hits All-time Low

15:07 · Oct 6

Currency

Dollar Extends Upside Momentum

12:28 · Oct 6

Currency

Euro Continues to Depreciate

10:24 · Oct 6

Currency

Indian Rupee Hits All-time Low

08:13 · Oct 6

Currency

Indian Rupee Weakens on Bond Inclusion Delay

07:42 · Oct 6

Currency

Asian Currencies Gain as Sentiment Improves

04:09 · Oct 6

Currency

New Zealand Dollar Jumps on Hawkish RBNZ

02:50 · Oct 6

Currency

Dollar Holds Gains on Fed Rate Hike Bets

20:12 · Oct 5

Currency

Canadian Dollar Falls on Fears of Hawkish BoC

14:24 · Oct 5

Currency

Dollar Approaches 112

12:49 · Oct 5

Currency

DXY Gains Nearly 1%

11:29 · Oct 5

Currency

Russian Ruble Weakens to 2-Week Low

10:38 · Oct 5

Currency

Sterling Eases from 3-Week High

09:21 · Oct 5

Currency

Euro Set to Remain Weak

06:00 · Oct 5

Currency

S.Korean Won Holds Gains After Inflation Data

05:45 · Oct 5

Currency

Indonesian Rupiah Appreciates

05:24 · Oct 5

Currency

Dollar Stabilizes as Hawkish Fed Supports

01:19 · Oct 5

Currency

NZ Dollar Jumps After RBNZ Decision

14:28 · Oct 4

Currency

Dollar Weakens Below 111

10:11 · Oct 4

Currency

South Korean Won Hovers Near 13-1/2-Year Low

10:04 · Oct 4