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US Treasury yields continue their recovery following the announcement of a bond buyback by the US Department of the Treasury, while data reveal that business activity remains solid despite a slowdown in manufacturing.Yields rise as strong services activity offsets Treasury buyback supportUS Treasury yields across the whole curve rose, with the 2-year Treasury yield – the most sensitive to changes to the Fed funds rate – rising five basis points (bps) to 4.24%, while the 10-year benchmark note, rose almos three bps to 4.474%.The US 30-year bond yield continued to grab headlines on major financial news websites, ending the week…

The Mexican currency appreciates to levels last seen in May 2024 as the USD/MXN falls to a two-year low as the US Dollar tumbles even though business activity in the services sector improved. The exotic pair trades at 16.92, down 0.22% for the week and 0.50% for the week.USD/MXN weakens on soft US Dollar and carry supportOn Friday, sentiment improved as a tailwind for the emerging market currency, which is also supported by the carry trade, due to a 275-basis-point interest rate differential in favour of the Mexican Peso against the Greenback. The latter, according to the US Dollar Index…

DBS economists Taimur Baig and Radhika Rao expect the Bank of Korea (BoK) to raise its base rate by 25bps to 3.00% at the August meeting, alongside upgraded Gross Domestic Product (GDP) and Consumer Price Index (CPI) forecasts. They highlight stronger-than-expected first-half growth, persistent core inflation and rising housing prices, but also note a hawkish hold is possible as financial conditions tighten and South Korean Won (KRW) appreciates.Rate hike with inflation concerns”We expect the Bank of Korea to raise the base rate by a further 25bps to 3.00% at this meeting, alongside an upgrade to its annual macroeconomic forecasts.””There is…

Commerzbank’s Moses Lim notes Malaysia’s July exports rose 38.0% year-on-year, marking a fourth month of double‑digit growth led by electronics and machinery. The bank highlights resilient external demand, strong shipments to the US and China, and an AI‑driven electronics cycle. USD/MYR has fallen for four sessions, with the Malaysian Ringgit slightly outperforming other Asian currencies versus the Dollar.Strong external demand underpins Ringgit”July exports rose 38.0% yoy (Bloomberg consensus: 35.0%) vs 45.5% in June, marking the fourth consecutive month of double-digit growth. The report suggests external demand remains resilient despite supply-chain disruption risks from renewed Middle East tensions. Growth was broad-based,…

The US Dollar Index (DXY) ended the week near even with Thursday, holding near 98.80. Like Thursday, DXY traded down to the 98.50s before recovering later in the session.The US Dollar Index trades near its lowest since May. The softness owes less to the data than to the plumbing: the US Treasury’s move to at least double its buybacks of longer-dated debt pulled yields lower and took the shine off the Greenback, even as Friday’s flash Purchasing Managers Index (PMI) surveys showed US activity still accelerating. Gold surged on Friday to a three-month peak above $4,600, the Australian Dollar climbed…

DBS economists Taimur Baig and Radhika Rao expect the Bank of Thailand (BoT) to keep its policy rate unchanged at 1.00% in August, extending the pause after June’s unanimous decision. They cite uneven economic growth, easing but still elevated headline inflation within the 1–3% target range, and scope for accommodative policy to support recovery alongside fiscal measures.Accommodative stance to support recovery”We expect the BoT to maintain its policy rate at 1.00% at its August meeting, extending the pause following June’s unanimous decision.””Economic growth remains uneven, with both private consumption and foreign tourism weak but stabilising, while goods exports and private…

The US Dollar (USD) is muted against the Japanese Yen (JPY). USD/JPY traded in the low 159.00s at the time of writing on Friday. In Japan, July inflation accelerated with headline consumer prices rising 1.9% from a year earlier and core measures firming, while August business surveys came in stronger than expected. Together they have hardened expectations that the Bank of Japan (BoJ) will raise rates at its September meeting, with swaps now pricing roughly an 80% chance of a move. That conviction is doing the heavy lifting for the Yen.A resilient United States (US) economy is pulling the other…

OCBC’s Sim Moh Siong and Christopher Wong stress that the Malaysian Ringgit (MYR) remains relatively well supported by a softer US Dollar (USD) and robust domestic fundamentals. July exports surged and the trade surplus widened, underpinned by strong electronics and firmer palm Oil prices, though he cautions that elevated Oil and long-end US Treasury yields may temper the immediate FX impact.Exports and trade surplus underpin MYR”MYR remained relatively well supported, helped by the softer USD backdrop and still-favourable domestic fundamentals.””Trade data released yesterday saw July exports rose 38.0% YoY, stronger than expected, while the trade surplus widened to MYR22.5bn, adding…

EUR/JPY trades around 185.70 on Friday at the time of writing, virtually unchanged on the day. The Japanese Yen (JPY) gains some support from firmer Japanese inflation data, but the move is offset by resilience in the Euro (EUR) following better-than-expected activity indicators in the Eurozone.In Japan, the core Consumer Price Index (CPI), which excludes fresh food, rises 1.8% YoY in July, following a 1.6% increase in June. This marks its fastest pace of growth since January. A measure excluding volatile components also points to persistent inflationary pressures, accelerating from the previous month.These figures reinforce expectations that the Bank of…

Kolkata: India’s foreign exchange reserves surged by nearly $50 billion since July as inflows swelled into the banks’ foreign currency non-resident bank (FCNR-B) following the Reserve Bank of India’s measures to attract dollars.The forex stockpile rose $9.905 billion in the week to August 14 taking the kitty to $716.90 billion, RBI data showed, marking the seven consecutive weekly rise.The country’s forex stockpile jumped by $49.975 billion in the past seven weeks as inflows poured into FCNR-B deposits of local banks.Foreign currency assets, the largest component of the reserves, rose $7.2 billion to $581.85 billion, making the biggest contribution to the…