From Marc Chandler at Bannockburn Global Forex:
Overview: The US dollar is trading softer against most G10 and emerging market currencies today. The dollar seemed to lose its bid late yesterday after Federal Reserve Governor Waller argued in favor a rate cut at this month's meeting, despite the TIC data that showed foreign investors bought more US securities in May than they did in the first five months of 2024 ($311 bln vs $95 bln), driving home the message again that the talk of a capital strike against the US over its large deficit/debt or loss of "American exceptionalism" has been grossly exaggerated. The US announced a 93.5% tariff on graphite from China (given the other tariffs the effective rates is near 160%), which may have the effect of making more it more expensive to develop an EV battery industry in the US.
Equities are mostly firmer today after the S&P 500 and Nasdaq reached record highs yesterday. In the Asia Pacific region, among the large bourses, Japan, South Korea, and India failed to join the advance. Europe's Stoxx 600 is extending yesterday's gain, which snapped a three-day slide. It is practically flat on the week. US index futures are steady to firmer. Japanese long bond yields softened slightly despite the measure of CPI that excludes fresh food and energy unexpectedly rose. There may have been some light position squaring ahead of Sunday's upper house election. European benchmark 10-year yields are up 1-3 bp to pare this week's declines. A notable exception is the 10-year Gilt, which has seen a nearly eight basis point increase this week. The 10-year US Treasury yield is slightly softer, near 4.44%, which is up about three basis points on the week. Gold is firmer near $3353 but still within its recently well-worn range. August WTI is trading at its best level since Monday, near $68.50 following a new batch of EU sanctions on Russia and its oil.
USD: A favorable combination of US data yesterday of stronger than expected retail sales, softer import prices, and the fifth consecutive decline in initial weekly jobless claims extended the Dollar Index's recovery....
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