Aussie Soars, EUR, GBP, EMFX, Stocks Rally; US Payrolls Next
News Summary
The dollar plunged against the Japanese yen to 143.45 in late New York trading after the Bank of Japan signaled it would end its negative interest rate regime this month.
The Japanese currency strengthened against all of its rivals, but especially against the U.S. dollar. The Dollar Index (DXY), a popular gauge of the greenback’s value against a basket of six major currencies, fell to 103.55 from 104.05 yesterday.
The Euro (EUR/USD) rose 0.33% to 1.0800 from 1.0785 yesterday. The British Pound (GBP/USD) rose to 1.2597 from 1.2580 yesterday. The British pound climbed off a one-week low of 1.2544.
The Australian dollar jumped 0.83% against the greenback to trade at 0.6605 from 0.6555 yesterday. New Zealand’s kiwi (NZD/USD) gained 0.6% against the greenback to 0.6177 from 0.6133.
Against the emerging market and Asian currencies, the greenback was lower. USD/CNH (Dollar-Chinese Yuan) slipped to 7.1640 from 7.1740. USD/SGD (dollar-Singapore dollar) slipped to 1.3375 from 1.3415, while USD/THB (dollar-Thai baht) fell to 35.15 from 35.35.
US Treasury yields fell. The benchmark 10-year yield settled at 4.13% from 4.17% yesterday. Other global interest rates were lower except for Japan’s. Ahead of today’s Bank of Japan meeting, Japan’s 10-year JGB yield climbed 8 basis points to 0.74%.
Wall Street stocks were higher. The U.S. S&P 500 rose 0.7% to 4,584 from 4,570. However, Japan’s Nikkei 225 (which includes the top 225 Japanese companies) slumped 2.09% to 32,440 from 32,920.
In data released yesterday, Japan’s annual Tokyo Core CPI eased to 2.3% from 2.7% previously and was lower than the median estimate of 2.4%. China’s Caixin Services PMI rose to 51.5 from 50.4.
The Eurozone’s final services PMI rose to 49.6 from 48.2, beating forecasts for 48.2. U.S. JOLTs job openings fell to 8.31 million from 9.35 million and missed the median estimate of 9.31 million.
USD/JPY – In another volatile session, the greenback fell to 143.45 at the close of trading in New York. Yesterday, the USD/JPY opened at 147.30. The overnight low was 141.59 and the overnight high was 147.18. One New York trader described it as a capitulation of the yen shorts.
AUD/USD – The Aussie battler jumped to 0.6605 after opening yesterday at 0.6550. In its own choppy trade, the overnight low for the Australian dollar was 0.6523. The Australian dollar rose to its overnight high of 0.6620 before settling.
EUR/USD – The Euro rallied against a generally weaker U.S. Dollar, closing at 1.0800 versus yesterday’s 1.0785. The common currency traded to an overnight high of 1.0817 before easing at the New York close. The overnight low was 1.0755.
GBP/USD – Sterling soared to 1.2595 in late New York from its opening at 1.2580 yesterday. Overnight, the British Pound rallied to a high at 1.2613. The GBP/USD pair traded to a low of 1.2544. A stronger than expected UK Final Services PMI to 50.9 from 50.5 supported Sterling.
