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The EUR/JPY cross trades in negative territory around 181.20 during the early European trading hours on Monday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as Japanese official projected a Bank of Japan (BoJ) rate hike this month.Japanese Prime Minister Sanae Takaichi’s economic adviser, Takuji Aida, said on Monday that the BoJ is expected to raise interest rates in September and keep hiking at a pace of once every quarter until January next year. “After the September rate hike, the BOJ will likely follow up with another increase by January next year,” said Aida. “After that, the BOJ will revert to a…
The dollar was on shaky ground on Monday, despite a ramp-up in U.S. rate hike bets as Middle East tensions raised the prospect of broader inflationary pressures that could force global central banks to tighten policy in tandem.A shift in sentiment towards the Japanese yen and worries about ever-growing U.S. debt and policy uncertainties also weighed on the greenback.Moves in currencies were largely subdued in early Asia trade with U.S. markets closed for a holiday, though the dollar struggled to sustain a brief lift it received from Friday’s blowout U.S. jobs report.The euro was up marginally at $1.1618, while sterling…
China’s Finance Ministry will inject billions into its largest banks and insurers, as Beijing moves to shore up balance sheets and sustain growth in a slowing economy, Bloomberg reported on Sunday.The source said at least eight financial institutions are seeking $53.6 billion in fresh capital, with the Ministry of Finance providing more than 80% of the funding.The latest stimulus plan is aimed at helping China bolster the ability of its financial sector to invest in the stock market and lend to businesses, amid signs that the world’s second-largest economy is struggling to escape weak growth.Market reactionAt the time of writing, the…
The Reserve Bank of India (RBI) will hold a 30-day variable rate reverse repo (VRRR) auction Monday with a target to suck out ₹7 lakh crore from the inter-bank market, which is flush with excess liquidity following the special dollar-mobilisation programme.The central bank has been conducting VRRR auctions almost every day to manage the surplus liquidity, which could potentially add to inflationary pressures. The excess liquidity also led the weighted call money rate to 4.95%, significantly below the policy rate.The RBI typically endeavours to align overnight call rates as close as possible to the policy repo rate, which stands at…
The dollar jumped on Friday after data showed that U.S. employers added 162,000 jobs in August, well above the 56,000 additions expected by economists, boosting bets on a September Federal Reserve interest rate hike.The dollar gave up some of its early gains, however, as U.S. markets head into a three-day holiday weekend and as traders waited on next week’s inflation data. Labor Day on Monday is a U.S. public holiday.August’s job gains followed an unexpected 23,000 job decline in July. The unemployment rate held steady at 4.1%.”I don’t think this number changes anything really,” said Noel Dixon, senior macro strategist…
OCBC’s Christopher Wong notes that Bank Negara Malaysia (BNM) kept the OPR at 2.75% and struck a slightly firmer tone, with growth expected to stay resilient into 2027. The economist still projects an OPR normalisation to 3.00% in January 2027. Wong highlights that a relatively firm domestic backdrop should support the Malaysian Ringgit, but says near-term USD/MYR moves will track the broader USD, risk sentiment and global rates.Ringgit supported but range-bound”BNM kept the OPR unchanged at 2.75%, as expected, but the accompanying statement carried a slightly firmer tone. “”BNM now expects the economy’s sound fundamentals to keep growth resilient into…
The Mexican Peso appreciates against the US Dollar, testing two-year highs near 16.85 as the USD/MXN sets aside a strong US Nonfarm Payrolls report, which was ignored by the Peso’s bears. At the time of writing, the emerging market pair trades at 16.88, poised to extend its losses and challenge the April 2024 lows at 16.74.USD/MXN Price Forecast: Technical OutlookPrice action suggests that the downtrend is poised to extend, as USD/MXN approaches two-year lows. Bearish momentum continues to increase as the Relative Strength Index (RSI) dives further into bearish territory.The first support area is the 16.50-mile milestone. Below the latter,…
Commerzbank highlights that Bank Negara Malaysia kept the OPR at 2.75% but shifted to a more hawkish bias, removing language that policy is “appropriate” and signalling vigilance on cost pressures. Strong growth and benign inflation allow patience, yet the bank appears to prepare markets for a possible hike later this year or early 2027, with USD/MYR seen in a 4.00–4.07 range.Hawkish BNM stance underpins MYR”Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) unchanged at 2.75% yesterday, as widely expected, but the statement contained a distinctly more hawkish tilt. The policy bias appears to have shifted from neutral towards…
The USD/CHF registers modest gains of over 0.30% as the Greenback is boosted by a solid US Nonfarm Payrolls report, pushing the pair above the 50-day Simple Moving Average (SMA) to reach a daily high of 0.8126. At the time of writing, trades at 0.8098. Source
OCBC’s Christopher Wong notes that USD/IDR has pulled back as a softer Dollar and lower UST yields support the Indonesian Rupiah. He highlights Bank Indonesia Governor Destry Damayanti’s emphasis on a stability-first approach, prioritizing Rupiah and macro stability while still supporting growth. Wong sees near-term support for IDR but flags elevated Oil prices and high global yields as constraints.Stability-first stance supports Rupiah”Speaking at the Sarasehan 100 Ekonom Indonesia in Jakarta on Thursday, BI Governor Destry Damayanti reinforced the stability-first message she had set out earlier in the week, stressing that policy cannot be viewed solely through the domestic inflation lens…