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Foreign Exchange Markets

The trading of national currencies against one another through spot, forward and swap contracts, where prices set the domestic value of cross-border cash flows.

Current stories

investOne report1 publisher

Dollar index heads for a 0.45% weekly fall as focus turns to US rate outlook and Iran worries fade

The dollar index is set for a 0.45% weekly fall, CNA reported, yet it rose on Wednesday when tech stocks sold off. The case that AI stress no longer lifts the dollar rests on one session and a conditional forecast.

Reality

Evidence58
Adoption
Not scored
Hype gap+12
Incentives
Not scored
Confidence60
investOne report1 publisher

Dollar eases from an 18-month high as traders price a Fed pause now and 75bp of hikes later

Dollar index slid 0.25% to 102.29 on Tuesday, just under its 18-month high, as traders bet Middle East tension stays contained before the midterms. Wednesday's CPI tests a Fed priced at an 80% hold this month and 75bp of tightening by late 2027.

Reality

Evidence62
Adoption
Not scored
Hype gap+5
Incentives
Not scored
Confidence65
investOne report1 publisher

Bullish dollar positions more than quadruple to $36 billion ahead of Wednesday's US inflation report

Bullish dollar positions rose to about $36 billion in the week to October 7 from $8.4 billion three weeks earlier, weekly US regulator data shows. Wednesday's US inflation report is the next test for a dollar trading near 18-month highs.

Reality

Evidence62
Adoption
Not scored
Hype gap+5
Incentives
Not scored
Confidence60
investOne report1 publisher

Euro's fifth weekly slide outlasts the French bond stress that drove it to $1.1161

The euro was on course for a fifth straight weekly drop on Friday, after worry over France's record debt sent it to a 17-month low of $1.1161 on Monday. The dollar index has also risen four weeks running, so the Fed's rate path now looks like a bigger driver than French budget politics.

Reality

Evidence58
Adoption
Not scored
Hype gap+12
Incentives
Not scored
Confidence55
investConfirmed2 publishers

French bond stress joins the Fed in pushing the euro toward a 17-month low

France's borrowing premium over Germany has widened to its highest since 2012, SCMP reported, as fiscal worries build before next year's election. Handelsbanken's FX strategist says the euro's weakness now comes partly from French politics, on top of a dollar lifted by a Fed leaning hawkish.

Reality

Evidence62
Adoption
Not scored
Hype gap+5
Incentives
Not scored
Confidence60
investConfirmed2 publishers

Chip-export dollars push the won price of 100 yen to its lowest since 2008

Koreans buying yen are paying the least in about 18 years, as 100 yen fell into the mid-800s of won this week from about 950 in early summer. Most of the drop is the won's chip-export rally against the dollar, Korea Times figures show, so the saving depends on that boom lasting.

Reality

Evidence68
Adoption
Not scored
Hype gap+15
Incentives
Not scored
Confidence64
investOne report1 publisher

Brent above $100 props up the dollar ahead of the Fed's September minutes

Brent's return above $100 lifted the dollar index 0.3% to 102.13 on Wednesday, even as traders cut October Fed hike odds to 21.6% from about 51%. That leaves the dollar leaning on oil prices while the September minutes test how much appetite the Fed still has for hikes.

Reality

Evidence60
Adoption
Not scored
Hype gap+10
Incentives30
Confidence55
investConfirmed5 publishers

France's widest bond spread since 2011 drags the euro to a 17-month low

France's bond spread over Bunds touched about 150 basis points on Friday, the most since 2011, and the euro fell to $1.1118 on Monday, a 17-month low. Holders of unhedged euro assets now carry French fiscal risk through the currency as well as through the bonds.

Perspective Coverage

6 publishers
Builder
Builder 0%
Operator
Operator 18%
Investor
Investor 82%

Reality

Evidence66
Adoption
Not scored
Hype gap+15
Incentives
Not scored
Confidence62
investConfirmed4 publishers

Ten-year Treasury yield climbs to 5.30%, its highest since 2002, despite cooler inflation

US 10-year Treasury yields rose to 5.30% on Wednesday, their highest since 2002, even though inflation came in cooler. Whatever drove it, growth or government debt, a cash-flow model that counted on cooling inflation to lower its discount rate now needs a higher one.

Perspective Coverage

4 publishers
Builder
Builder 5%
Operator
Operator 16%
Investor
Investor 79%

Reality

Evidence85
Adoption
Not scored
Hype gap+10
Incentives25
Confidence80
investOne report1 publisher

FX option volatility hits a post-COVID low as speculators build a record $51.4 billion dollar long

Speculators built a record $51.4 billion net dollar long by late July, weeks before G5 currency option volatility sank to a post-COVID low of 5.33. Currency protection got cheaper even as year-end rate bets climbed from 3.05% to above 4%.

Publishers:seekingalpha.com

Reality

Evidence55
Adoption
Not scored
Hype gap+10
Incentives
Not scored
Confidence45
investOne report1 publisher

Surveyed FX forecasters put Korea's ideal won 33 to 58 won stronger than the market's close

A Seoul Economic Daily poll of 20 foreign exchange specialists puts the level that would steady Korean growth and inflation in the low 1,300s. The question it asked was what level is appropriate.

Publishers:en.sedaily.com

Reality

Evidence55
Adoption
Not scored
Hype gap+22
Incentives52
Confidence68
investOne report1 publisher

The Dollar Index climbs to the 61.8% retracement of its decline from June's high

The Fed's unanimous quarter-point hike still pushed the two-year yield higher, and the dollar gained on both the yen and the Canadian dollar. Marc Chandler sees a quieter data week making politics more salient.

Publishers:seekingalpha.com

Reality

Evidence42
Adoption
Not scored
Hype gap+12
Incentives35
Confidence40
investOne report1 publisher

Yen rallies 7.5% as BOJ widely expected to hike rate to 31-year high

Polls put a 25 basis point move to 1.25% at 88% to 97%, and speculators have already flipped net long the yen. According to cryptobriefing.com, further strength now needs a BOJ surprise or a Fed cut.

Reality

Evidence48
Adoption60
Hype gap+10
Incentives40
Confidence55
investOne report1 publisher

Edmond de Rothschild's Nizard builds the carry-unwind case on a 3% yen month

The case that the yen carry trade is unwinding rests on one named asset manager's report, relayed by Bloomberg, and on a single month of price action in a currency that has already given part of it back.

Publishers:en.sedaily.com

Reality

Evidence34
Adoption
Not scored
Hype gap+38
Incentives68
Confidence52
investOne report1 publisher

Won's exchange rate drops 226.8 won over two months amid NPS hedging shifts, yen strength and exporter dollar selling

The rate touched 1,334.7 on the 7th, and the pension fund bid that traders are pricing as a floor is unconfirmed talk attached to a hedge book that runs off on six- and twelve-month maturities.

Publishers:en.sedaily.com

Reality

Evidence58
Adoption
Not scored
Hype gap+15
Incentives60
Confidence52