FX Daily: Joint yen intervention is a containment exercise
USD: Market still buying into a Fed hike In theory, the dollar should be broadly weaker today after the US and Japanese authorities confirmed joint FX intervention (more below) and the Japanese probably sold $70-80bn over the last three days. Lower oil prices should also be weighing on the dollar on reports from US President ...
The joint yen intervention between the US and Japanese authorities has been seen as a containment exercise to limit the yen's decline. Despite recent sell-offs, the dollar remains relatively strong due to ongoing concerns about a September Fed hike. The Fed's decision hinges on US data, particularly the upcoming non-farm payrolls report.
Meanwhile, EUR/USD is not as buoyed by the intervention as one might expect, likely due to US authorities also intervening in the EUR/JPY market. The US Treasury's limited euro-denominated reserves suggests a lack of significant impact on the euro. The Fed's September decision will be the primary driver for the EUR/USD trend. In Japan, intervention is primarily a containment measure, limiting investors from chasing USD/JPY through 160 and allowing Tokyo to introduce more yen-positive policies.
The new month begins with Turkey's data, with July CPI inflation expected to rise to 1.7% year-on-year, from 1.5% previously. The Czech Republic's inflation is also expected to increase, while Hungary's is forecast to decline. EUR/HUF touched local highs near 365 due to global risk-off sentiment.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
