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Gertrude Chavez-Dreyfuss

Dollar rises as Fed cuts rates, but easing outlook uncertain

19 Sep 2019

NEW YORK The dollar hit a seven-week high against the yen and a three-month peak versus the Swiss franc on Wednesday after the Federal Reserve cut interest rates by a quarter of a percentage point, as expected, but gave an uncertain outlook on future easing and sounded less bleak about the U.S. economy.

FOREX-Dollar gains as Fed cuts rates, but easing outlook uncertain

19 Sep 2019

* Fed cuts rates, but gives uncertain outlook * Fed reduces rates on excess reserves * Dollar holds near 7-week high vs yen after Fed decision * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (New throughout, updates prices, market activity and analyst comment following Fed decision and statement) By Gertrude Chavez-Dreyfuss NEW YORK, Sept 18 The dollar firmed on Wednesday and traded near a seven-week high against the yen, after the Federal Reserve cut interest rates by a quarter of a percentage point, as expected, but gave an uncertain outlook on future easing. The dollar touched session peaks against the yen after the Fed decision, rising in seven of the last eight sessions. In cutting interest rates by 25 basis points for the second time this year, the Fed gave a nod to ongoing global risks and "weakened" business investment and exports. But new projections showed policymakers at the median expected rates to stay within the new range through 2020. However, in a sign of ongoing divisions within the Fed, seven of 17 policymakers projected one more quarter-point rate cut in 2019. "Another rate cut from the Fed to try to shield the U.S. economy from global headwinds. Today's move was more of a hawkish easing in that the Fed’s median forecasts for rates suggested no more cuts this year, while some officials dissented," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. "The tone of the Fed's new forecasts remained largely sanguine despite the global risks. Consequently, the dollar isn't likely to stray far from recent highs." In mid-afternoon trading, the dollar rose 0.2% to 108.35 yen, just below a seven-week high of 108.37 yen tested overnight. The dollar index, tracking the unit against a basket of other currencies, was up 0.2% at 98.49. The euro fell 0.3% to $1.1031 Aside from cutting interest rates, the Fed changed two key rates used to manage its main policy lever. It lowered the interest it pays on excess bank reserves (IOER) by 30 basis points, to 1.80%. The rate now sits 20 basis points below the top of the target range, compared to 15 basis points previously. The Fed also set its offering rate for any necessary operations in the $2.2 trillion repurchase agreement, or repo, market, at 1.70%, five basis points below the bottom of the new target range for the policy rate. The changes came after turmoil this week in funding markets briefly pushed the overnight bank-to-bank lending rates above the U.S. central bank's target range. After the Fed releases its policy decision, attention will turn to the Bank of Japan's meeting ending on Thursday, to see whether it eases policy, too. Deepening negative rates will be an option if the BOJ eases, although the central bank may accompany that with measures to mitigate the pain on financial institutions, sources have told Reuters. ======================================================== Currency bid prices at 2:33PM (1833 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1035 $1.1071 -0.33% -3.78% +1.1075 +1.1026 Dollar/Yen JPY= 108.2800 108.1200 +0.15% -1.80% +108.3700 +108.0900 Euro/Yen EURJPY= 119.49 119.69 -0.17% -5.33% +119.8100 +119.4200 Dollar/Swiss CHF= 0.9967 0.9930 +0.37% +1.56% +0.9973 +0.9927 Sterling/Dollar GBP= 1.2469 1.2500 -0.25% -2.26% +1.2510 +1.2440 Dollar/Canadian CAD= 1.3296 1.3241 +0.42% -2.50% +1.3302 +1.3240 Australian/Doll AUD= 0.6828 0.6864 -0.52% -3.14% +0.6869 +0.6822 ar Euro/Swiss EURCHF= 1.0998 1.0994 +0.04% -2.27% +1.1019 +1.0985 Euro/Sterling EURGBP= 0.8847 0.8855 -0.09% -1.52% +0.8880 +0.8846 NZ NZD= 0.6322 0.6356 -0.53% -5.88% +0.6362 +0.6316 Dollar/Dollar Dollar/Norway NOK= 8.9567 8.9210 +0.40% +3.68% +8.9712 +8.9230 Euro/Norway EURNOK= 9.8840 9.8792 +0.05% -0.22% +9.9062 +9.8678 Dollar/Sweden SEK= 9.7218 9.6693 +0.19% +8.46% +9.7316 +9.6669 Euro/Sweden EURSEK= 10.7280 10.7078 +0.19% +4.52% +10.7431 +10.7040 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette Baum and David Gregorio)

Dollar edges higher as Fed rate decision looms

18 Sep 2019

NEW YORK The dollar rose on Wednesday and was trading near a seven-week high against the yen, ahead of a Federal Reserve policy meeting where officials are widely expected to cut interest rates by a quarter of a percentage point.

FOREX-Dollar edges higher as Fed rate decision looms

18 Sep 2019

* Fed likely to deliver hawkish cut-analyst * Dollar holds near 7-week high vs yen * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Updates prices, adds new comment, FX table, changes byline, dateline; previous LONDON) By Gertrude Chavez-Dreyfuss NEW YORK, Sept 18 The dollar rose on Wednesday and was trading near a seven-week high against the yen, ahead of a Federal Reserve policy meeting where officials are widely expected to cut interest rates by a quarter of a percentage point. Many investors, however, were pricing in less aggressive action from the Fed going forward as inflationary pressures and wage growth have been steady, even as pockets of the U.S. economy, such as the service sector, have shown steady improvement. "The Fed is likely to deliver a hawkish cut, reflecting a mix of positioning and expectations," said Mark McCormick, global head of FX strategy, at TD Securities in New York. "The Fed will leave room to do more...and the dots are unlikely to offer a crystal clear path to steeper cuts down the road." Fed officials' median projection on the number of rate moves is commonly referred to as its "dot-plot." In morning trading, the dollar edged up 0.1% to 108.18 yen, just below a seven-week high of 108.37 yen tested overnight. The dollar index, tracking the unit against a basket of other currencies, rose 0.1% to 98.352. With recent economic data proving to be strong -- a Citigroup U.S. economic surprise index is holding at its highest levels this year -- some market participants are buying the dollar in case the Fed signals a more confident view. "All in, we think the meeting outcome risks disappointing market expectations, which are perhaps leaning towards a more dovish outcome, resulting in a renewed bid for the dollar," Scotiabank strategists said. The dollar has been driven more by trade tensions between Washington and Beijing this year than by U.S. monetary policy, analysts said. The dollar has gained nearly 1% against the yen since the last rate cut in July. A retreat in global oil prices also restored some calm to markets. Oil prices fell in Asia, extending Tuesday's 6% decline, after Saudi Arabia's energy minister said the kingdom had tapped stockpiles to restore oil supplies to where they stood before weekend attacks shut around 5% of global output. The euro slipped 0.1% to $1.1056, still higher than the $1.0927 reached last week, the lowest in more than two years. After the Fed releases its policy decision, attention will turn to the Bank of Japan's meeting ending on Thursday, to see whether it eases policy, too. Deepening negative rates will be an option if the BOJ eases, although the central bank may accompany that with measures to mitigate the pain on financial institutions, sources have told Reuters. ======================================================== Currency bid prices at 9:33AM (1333 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1053 $1.1071 -0.16% -3.63% +1.1075 +1.1037 Dollar/Yen JPY= 108.1600 108.1200 +0.04% -1.90% +108.2700 +108.0900 Euro/Yen EURJPY= 119.57 119.69 -0.10% -5.27% +119.8100 +119.4200 Dollar/Swiss CHF= 0.9956 0.9930 +0.26% +1.45% +0.9962 +0.9927 Sterling/Dollar GBP= 1.2466 1.2500 -0.27% -2.28% +1.2510 +1.2440 Dollar/Canadian CAD= 1.3253 1.3241 +0.09% -2.82% +1.3271 +1.3240 Australian/Doll AUD= 0.6840 0.6864 -0.35% -2.97% +0.6869 +0.6830 ar Euro/Swiss EURCHF= 1.1008 1.0994 +0.13% -2.19% +1.1010 +1.0985 Euro/Sterling EURGBP= 0.8866 0.8855 +0.12% -1.31% +0.8880 +0.8852 NZ NZD= 0.6333 0.6356 -0.36% -5.72% +0.6362 +0.6330 Dollar/Dollar Dollar/Norway NOK= 8.9353 8.9210 +0.16% +3.43% +8.9712 +8.9245 Euro/Norway EURNOK= 9.8778 9.8792 -0.01% -0.28% +9.9062 +9.8780 Dollar/Sweden SEK= 9.6961 9.6693 +0.10% +8.17% +9.7274 +9.6669 Euro/Sweden EURSEK= 10.7189 10.7078 +0.10% +4.43% +10.7431 +10.7040 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by Bernadette Baum)

Foreigners buy Treasuries in July after outflows for two straight months: data

18 Sep 2019

NEW YORK Foreigners bought U.S. Treasuries in July after selling them for two straight months, according to U.S. Treasury department data released on Tuesday, a precursor to the sector's steep rally in August.

Dollar slips ahead of Fed rate decision, euro rises

18 Sep 2019

NEW YORK The U.S. dollar fell on Tuesday in range-bound trading on the eve of an expected interest rate cut by the Federal Reserve, weakened by a fall in oil prices and a stronger euro.

Huobi announces launch of cryptocurrency exchange in Argentina

17 Sep 2019

Huobi Group, which runs one of the world's largest cryptocurrency exchanges, announced on Tuesday the official launch of a digital asset exchange in Argentina.

FOREX-Dollar slips ahead of Fed rate decision

17 Sep 2019

* Market awaits 25 basis-point cut by the Fed * Investors also worried by spike in overnight rates * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Updates prices, adds details on euro rise) By Gertrude Chavez-Dreyfuss NEW YORK, Sept 17 The dollar fell on Tuesday in choppy range-bound trading on the eve of an expected U.S. interest rate cut from the Federal Reserve, with markets anxious about an overnight spike in dollar funding costs. The overnight rate, or the cost for banks and Wall Street dealers to borrow dollars, surged to 10% on Tuesday, the highest since at least January 2003, according to Refinitiv data. Analysts attributed quarterly corporate tax payments and settlement of $78 billion in Treasuries supply for the spike on Monday in interest rates in the repurchase agreement (repo) market. "This morning's funding squeeze has put some upward pressure earlier in the dollar, but that is not likely to be a longer-term driver," said Erik Nelson, currency strategist, at Wells Fargo Securities in New York. He added that the reaction in the FX market after key events is not always cut and dry. "We also have the Fed tomorrow and market participants are marking time ahead of the decision. So it's pretty much back and forth right now," Nelson said. Though investors expect a 25 basis points rate cut, some believe this may be the last rate cut for a while absent more evidence of a U.S. economic slowdown. Money markets are pricing in about an 80% probability of another rate cut by year end. "If the Fed does cut 25 bps, then we think it will be the last time until we really do see signs of recession," Brown Brothers Harriman strategists said in a note. Against a basket of its rivals, the greenback edged 0.1% lower to 98.506. Geopolitical tensions on Monday supported the dollar against some currencies after weekend attacks on a Saudi Arabian oil field. The yen, also a safe haven, also did well. Though oil prices pulled back slightly from Monday's four-month highs, they remained about 15% higher than Friday's close on wariness that attacks on Saudi Arabian crude oil facilities could trigger a military response. U.S. President Donald Trump said on Monday he did not want to go to war but also said Washington was still investigating if Iran was behind the strikes. In other currencies, the euro was up 0.4% at $1.1030, catching a bid after an influential survey showed a brightening in German investor confidence. The ZEW index improved to -22.5 in September versus forecasts of -37 and the August reading of -44.1. Against the yen, the dollar was up 0.1% at 108.30 yen. ======================================================== Currency bid prices at 10:47AM (1447 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1042 $1.1000 +0.38% -3.72% +1.1046 +1.0991 Dollar/Yen JPY= 108.2500 108.1200 +0.12% -1.82% +108.3600 +108.0300 Euro/Yen EURJPY= 119.56 118.95 +0.51% -5.28% +119.6400 +118.8800 Dollar/Swiss CHF= 0.9948 0.9925 +0.23% +1.37% +0.9968 +0.9914 Sterling/Dollar GBP= 1.2474 1.2428 +0.37% -2.22% +1.2479 +1.2394 Dollar/Canadian CAD= 1.3281 1.3235 +0.35% -2.61% +1.3298 +1.3234 Australian/Doll AUD= 0.6848 0.6864 -0.23% -2.85% +0.6870 +0.6831 ar Euro/Swiss EURCHF= 1.0988 1.0922 +0.60% -2.36% +1.0992 +1.0914 Euro/Sterling EURGBP= 0.8853 0.8848 +0.06% -1.46% +0.8889 +0.8849 NZ NZD= 0.6335 0.6343 -0.13% -5.69% +0.6349 +0.6323 Dollar/Dollar Dollar/Norway NOK= 8.9606 8.9599 +0.01% +3.73% +8.9818 +8.9405 Euro/Norway EURNOK= 9.8962 9.8593 +0.37% -0.10% +9.9046 +9.8568 Dollar/Sweden SEK= 9.6954 9.6558 +0.80% +8.16% +9.7286 +9.6530 Euro/Sweden EURSEK= 10.7080 10.6226 +0.80% +4.33% +10.7151 +10.6240 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by David Gregorio and Nick Zieminski)

FOREX-Dollar drifts lower ahead of Fed rate decision

17 Sep 2019

* Market awaits 25 basis-point cut by the Fed * Investors also worried by spike in overnight rates * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (New throughout, updates prices, market activity, commens, adds FX table; new byline, changes dateline; previous LONDON) By Gertrude Chavez-Dreyfuss NEW YORK, Sept 17 The dollar dipped on Tuesday in choppy range-bound trading on the eve of an expected U.S. interest rate cut from the Federal Reserve, but the greenback drew support from geopolitical tensions. The dollar has fallen in three of the last four sessions, and is down so far this month. Investors were also watching an overnight spike in dollar funding costs. The overnight rate, or the cost for banks and Wall Street dealers to borrow dollars, surged to 10% on Tuesday, the highest since at least January 2003, according to Refinitiv data. Analysts attributed quarterly corporate tax payments and settlement of $78 billion in Treasuries supply for the spike on Monday in interest rates in the repurchase agreement (repo) market. "This morning's funding squeeze has put some upward pressure earlier in the dollar, but that is not likely to be a longer-term driver," said Erik Nelson, currency strategist, at Wells Fargo Securities in New York. "We also have the Fed tomorrow and market participants are marking time ahead of the decision. So it's pretty much back and forth right now," he added. Though investors expect a 25 basis points rate cut, some believe this may be the last rate cut for a while absent more evidence of a U.S. economic slowdown. Money markets are pricing in about an 80% probability of another rate cut by year end. "If the Fed does cut 25 bps, then we think it will be the last time until we really do see signs of recession," Brown Brothers Harriman strategists said in a note. Against a basket of its rivals, the greenback edged 0.1% lower to 98.541. Geopolitical tensions supported the dollar. Though oil prices pulled back slightly from Monday's four-month highs, they remained about 15% higher than Friday's close on wariness that attacks on Saudi Arabian crude oil facilities could trigger a military response. U.S. President Donald Trump said on Monday he did not want to go to war but also said Washington was still investigating if Iran was behind the strikes. The euro was up 0.3% at $1.1030. Against the yen, the dollar was up 0.1% at 108.28 yen. ======================================================== Currency bid prices at 9:58AM (1358 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1029 $1.1000 +0.26% -3.84% +1.1039 +1.0991 Dollar/Yen JPY= 108.2300 108.1200 +0.10% -1.84% +108.3600 +108.0300 Euro/Yen EURJPY= 119.39 118.95 +0.37% -5.42% +119.5000 +118.8800 Dollar/Swiss CHF= 0.9959 0.9925 +0.34% +1.48% +0.9968 +0.9914 Sterling/Dollar GBP= 1.2438 1.2428 +0.08% -2.51% +1.2443 +1.2394 Dollar/Canadian CAD= 1.3279 1.3235 +0.33% -2.63% +1.3298 +1.3234 Australian/Doll AUD= 0.6842 0.6864 -0.32% -2.94% +0.6870 +0.6831 ar Euro/Swiss EURCHF= 1.0985 1.0922 +0.58% -2.39% +1.0992 +1.0914 Euro/Sterling EURGBP= 0.8865 0.8848 +0.19% -1.32% +0.8889 +0.8849 NZ NZD= 0.6336 0.6343 -0.11% -5.67% +0.6349 +0.6323 Dollar/Dollar Dollar/Norway NOK= 8.9512 8.9599 -0.10% +3.62% +8.9818 +8.9405 Euro/Norway EURNOK= 9.8742 9.8593 +0.15% -0.32% +9.9046 +9.8568 Dollar/Sweden SEK= 9.6885 9.6558 +0.62% +8.08% +9.7286 +9.6530 Euro/Sweden EURSEK= 10.6885 10.6226 +0.62% +4.14% +10.7151 +10.6240 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by David Gregorio)

TREASURIES-U.S. yields rise to multi-week highs on receding trade tensions, data

13 Sep 2019

* U.S. retail sales rise more than expected * China exempts some U.S. goods from additional tariffs * Highest weekly rise since Nov 2016 seen for 10-,30-year yields * Largest weekly gain since June 2009 for U.S. 2-year yield (Recasts, adds comment, details, byline, Treasuries table, updates prices) By Gertrude Chavez-Dreyfuss NEW YORK, Sept 13 U.S. Treasury yields climbed to multi-week peaks on Friday, as trade tensions between the United States and China eased further after more conciliatory measures, with U.S. recession risks continuing to diminish after stronger-than-expected retail sales data. Yields on U.S. benchmark 10-year notes and 30-year bonds hit five-week highs, while those on two-year notes touched their highest in six weeks. Both 10-year and 30-year yields were on track for their largest weekly rise since U.S. President Donald Trump's election in November 2016. The U.S. two-year yield was on pace for its highest weekly increase since June 2009. "We have the continued warming of relationships over the trade talks. And we have the consumer still strong with retail sales and those two just added fuel to the fire," said Ellis Phifer, market strategist at Raymond James in Memphis, Tennessee. "Have we turned the corner in rates? I don't know if it's a complete turn. We have had a reversal for now, but we have trade talks coming up and we have the Federal Reserve meeting coming up. There is a lot of potential news that could turn us back around." On Friday, China's official Xinhua News Agency reported that Beijing will exempt some agricultural products from additional tariffs on U.S. goods. The United States and China have both made amicable gestures, with China renewing purchases of U.S. farm goods and Trump delaying a tariff increase on certain Chinese goods. On the data front, U.S. retail sales increased more than expected in August, rising 0.4%, lifted by spending on motor vehicles, building materials, healthcare and hobbies. The average forecast was for a 0.2% gain in August. Excluding automobiles, gasoline, building materials and food services, retail sales climbed 0.3% last month after rising by a downwardly revised 0.9% in July. "The resilience of core inflation and control retail spending may reduce the forward markets odds of a rate cut in October to lower than 45%," said John Herrmann, rates strategist at MUFG Securities Americas in New York. In mid-morning trading, U.S. benchmark 10-year note yields rose to 1.827% from 1.791% late on Thursday, hitting a fresh five-week high of 1.843% after the retail sales data. Yields on 30-year bonds were also higher at 2.301% from 2.264% on Thursday, touching a five-week high as well of 2.317%. U.S. two-year yields, on the other hand, hit a six-week peak of 1.767% following the retail sales data. They were last up at 1.744%, from Thursday's 1.727%. September 13 Friday 10:01 AM New York/1401 GMT Price Current Net Yield % Change (bps) Three-month bills 1.9175 1.9585 0.003 Six-month bills 1.85 1.8982 0.000 Two-year note 99-132/256 1.7529 0.026 Three-year note 99-106/256 1.7013 0.029 Five-year note 97-240/256 1.6855 0.035 Seven-year note 97-124/256 1.7608 0.033 10-year note 98-40/256 1.8291 0.038 30-year bond 98-216/256 2.3037 0.040 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap -0.50 1.25 spread U.S. 3-year dollar swap -3.50 0.75 spread U.S. 5-year dollar swap -6.00 0.75 spread U.S. 10-year dollar swap -11.50 0.50 spread U.S. 30-year dollar swap -41.50 1.00 spread (Reporting by Gertrude Chavez-Dreyfuss; Editing by Kevin Liffey)

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