The USD moved higher today in somewhat quiet trading. Fed’s Cook weighed in after the meeting last week and the US employment statistics.
In summary, the Fed Governor:
Highlighted concerns about property prices, noting that both residential and commercial property prices are currently elevated beyond historical levels associated with economic fundamentals. She expressed worry that if commercial mortgage delinquency rates rise, it could lead to sharp declines in commercial real estate prices. While business borrowing is at high levels, Cook pointed out that debt servicing capacity remains strong due to healthy profits and limited impact from high interest rates. On the household front, there is resilience in terms of debt, although some signs of stress are emerging among those with weak credit. Additionally, Cook raised concerns about vulnerabilities in non-bank financial institutions, which could amplify stress during tightening financial conditions and an economic slowdown. She emphasized the importance of building resilience to economic shocks, particularly for large banks, and expressed hope that current policy measures would be sufficient to return inflation to the Fed’s 2% target.
The Fed’s Powell will have the opportunity to reiterate his thoughts from last week on Wednesday and Thursday.
The day did not have any US economic releases.
In the markets, yields moved higher which also help to support the US dollar. In the US debt market:
- 2-year yield 4.942% +11.1 basis points
- 5-year yield 4.600% +11.2 basis points
- 10-year yield 4.655% +9.8 basis points
- 30-year yield 4.821% +6.9 basis points
Looking at the US dollar, it was the strongest of the major currencies. The greenback rose the most vs the NZD (+0.62%). It was higher by 0.46% vs the JPY.
The US dollar is the strongest of the major currencies
The USDJPY is trading near session highs and back above the 150.00 level (at 150.05 currently). Last week, the price fell to a low of 149.18 before rising modestly into the close to 149.31. On the topside, the 150.15 – 150.18 is the next target area. That area is home to the swing high going back to early October at 150.154, and the 200-hour moving average at 150.183.
Crude oil today is trading up $0.35 or 0.43% had $80.86. :
- Both Saudi Arabia and Russia agreed to continue their voluntary output cuts until the end of the year.
Gold is down $14.50 or -0.75% at $1977.55.
Bitcoin is little changed at $35,039 after trading as high as $35,290 and as low as $34,766.
The Reserve Bank of Australia will announce their interest-rate decision at 10:30 PM ET with expectations of a hike of 25 basis points to 4.35% the high price and today reached 0.6521 which stalled the pair right near the high of a swing area down (between 0.6520 and 0.65214). The price is trading below that area at 0.6486.
On the downside, we high from Thursday comes in at 0.6455. Moving below that level would have traders targeting the 38.2% retracement of the move up from last week’s low at 0.6443 and the rising 100-hour moving average of 0.6432.
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