From Marc Chandler at Bannockburn Global Forex:
Overview: In thin markets, the dollar has been stomach-punched. It is off by more than 1% against six of the G10 currencies today. The Canadian dollar is the worst performing, and it is up nearly 0.50% and is at new eight-month highs. As we observed, the dollar was vulnerable. The attack on the independence of the Federal Reserve is the latest trigger. And preliminary April South Korean export data showed exports to the US collapsed more than 14%. Many centers, including Hong Kong and Australia in the Asia Pacific region and many in Europe are closed for the extended Easter holiday. The thinner markets may be exacerbating the moves, but the direction is clear. The only emerging market currency unable to find traction against the greenback today has been the beleaguered Turkish lira.
Equities were mixed in the Asia Pacific region, but US index futures point to a gap lower opening today. The S&P 500 and Nasdaq futures are off by more than 1%. Like we saw earlier this month, the rise in US rates is not lending the dollar support. Our working hypothesis continues to be that given the risks associated with the Trump administration, investors and other market participants are demanding a higher US interest rate premium to compensate them. Due to the UK holiday, US Treasuries are not trading in Europe. The futures point to little change in US rates, though we anticipate that the prospect of Fed easing in the face of the tightening of financial conditions will support the short end of the curve and further curve steepening. Gold is setting a fresh record high near $3400. June WTI is off around 2.75% to unwind most of the gains from last Thursday to trade near $62.25.
USD: The US bond and equity markets stabilized last week, and the Dollar Index was pinned in its trough near 99.00. It has taken another leg down following threats to the Federal Reserve's independence and indication from South Korea's exports about the wide impact of US tariffs. The Dollar Index has probed the 98.00 area, a new three-year low....
....MUCH MORE
As we mentioned last week the yuan, which is not included in the DXY index, has been strengthening since April 8ths 7.3498 print:
7.2885 last.
