From Marc Chandler at Bannockburn Global Forex:
Overview: The dollar rallied in North America yesterday and the foreign exchange market seems to be waiting for its leadership again today. Against the G10 currencies, the greenback is consolidating in narrow ranges near yesterday's best levels without advancing. The dollar is mixed against the major currencies but is not much more than +/- 0.15%. Emerging market currencies are mixed with most of Asia Pacific currencies a little lower and central Europe slightly firmer. The news stream is light. Besides the unexpected flat Tokyo September CPI, the market is digesting a rash of new tariff announcements by the US. They include 100% on non-generic pharma (with an exemption for companies building facilities in the US) 25% on heavy trucks, 50% on kitchen cabinets/vanities, and 30% on upholstered furniture. The details and impacts are still be thought through.
Asia Pacific equities tumbled, led by a nearly 2.5% slide in South Korea, a 1.7% drop in Taiwan, and a nearly 1.4% loss in Hong Kong. European pharma may (or may not) be protected by the previous 15% levy agreement, and the Stoxx 600 is recouping about half of yesterday's 0.65% decline. US index futures are narrowly mixed. European benchmark 10-year yields are 1-2 bp softer, while the US 10-year yield is little changed slightly below 4.17%. Just as 4.0% marks the lower end of the range (on a closing basis) the 4.20% marks the upper end of the recent range. Gold is trading sideways, and like yesterday, remains in Wednesday's range (~$3717-$3779). November WTI edged up to a marginal new high near $65.40 before meeting sellers that pushed it back to about $64.80. The 200-day moving average is near $64.35. It settled around $62.40 last week. If the nearly 4% gain this week is sustained, it would be the largest weekly advance since June.USD: The Dollar Index is firm. It absorbed offers near 98.00. Overcoming resistance near 98.25 sent it to 98.60 area. It is in a narrow range near yesterday's highs (~98.30-55). The 98.70 area is the (61.8%) retracement objective of the slide since August 1. It also corresponds to the highs going back to the middle of August. Above there could target 99.30. DXY is poised for its first back-to-back weekly gain since July. The US reports personal income, consumption, and deflators today. Income is expected to have risen by 0.3% and consumption by 0.5%. However, the nominal rise in consumption is largely a function of higher prices. In real terms, consumption expenditures have not grown this year (monthly average through July is zero). The Fed targets the headline PCE deflator, yet the media insists on calling the core deflator the Fed's "preferred measure". In any event....
....MUCH MORE
