The US Greenback (USD) is ending the week on a agency be aware, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
USD positive factors as US fairness futures, Treasurys weaken on tariff information
“Extra tariff threats—35% on Canada from August 1, baseline 15-20% tariffs elsewhere and a suggestion from President Trump that the EU might get its tariff letter shortly—boosted the USD and weighed on the foremost currencies. The CHF is resisting the USD advance although whereas the JPY is underperforming, together with excessive beta FX. The USD positive factors replicate elevated threat aversion amid weaker equities—European shares are down sharply and US futures are decrease by 0.5/0.6%—and decrease bonds.”
“US Treasurys are underperforming and Sep FOMC pricing has seen charge minimize expectations pared again marginally Greenback positive factors could also be getting some yield assist however largely look to be a kneejerk response to commerce headlines greater than something. It’s notable that whereas the uptrend within the DXY that received underway initially of the month stays intact, the bounce within the greenback in response to those newest tariff developments didn’t prolong the rise within the index.”
“Most currencies have discovered assist round (or near) their lows seen earlier within the week. Buyers might think about these threats to be largely negotiating ways at this level. The DXY rebound has some first rate technical traction, which a agency shut on the week will solidify. However, after 9 consecutive every day positive factors within the DXY, the rebound by way of the higher 97s is beginning to look a bit stretched, no less than within the quick run, and is difficult some longer-run technical resistance. We might even see a interval of choppier worth motion develop within the greenback from right here.”
