From Marc to Market:
In the relatively quiet conditions that have prevailed this week, the US dollar is trading with a mostly firmer bias. Rising US rates amid the technically oversold short-term market are lending the greenback support. The dollar remains firm against the yen, even though the Deputy Governor of the BOJ seemed to support speculation of a rate hike next month. US rates seem to fit better with changes in the exchange rate than Japanese rates.
It appears, unsurprisingly, that Russia and China have formally rejected adhering to the US economic chokehold on Iran. Without their participation in “Operation Economic Outcast”, the US policy seems to be a way to disengage with making such a declaration. If the it is retreating from the war in Iran, it is threatening to escalate the trade war with Canada. Trade Representative Greer has threatened banning some Canadian imports to the US. Given the asymmetries, the Canadian dollar has held its own so far this week. It is off about 0.25%, a middling performer in the G10....
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