USD: Focus on the $58bn 3-year auction – ING

Source Fxstreet

Examining FX performance from both a spot and total return perspective over the last month reveals a bloc of four currencies that stand out. These are the Norwegian Krone, the Pound Sterling and the Australian and New Zealand Dollars. What does GBO have in common with these commodity currencies? High yields. Like the krone, sterling offers implied yields over 4% per annum. This is important because, by nature of the Fed's prolonged pause, the dollar also has yields at over 4% p.a. and taking a short position against the dollar will prove expensive unless investors get the timing right

Any good news is probably a USD positive

"Friday's US jobs data did not unleash another wave of pessimism on the US economy, and this week's US data calendar is light apart from tomorrow's release of May's CPI – which is expected at orderly/soft levels. Importantly, it doesn't seem that merely soft price data is enough to restart the Fed easing cycle. For instance, the Fed is probably looking at a 5-year, 5-year USD inflation swap and noting it at a very comfortable 2.5% – portraying no signs of recessionary/deflationary fears."

"On the radar, however, is tonight's $58bn 3-year Treasury auction. If there is growing interest in the de-dollarisation story, foreigners (who own around 25% of the outstanding Treasury supply) perhaps do not roll maturing Treasury holdings into new issues. The focus therefore will be on the indirect bid at the auction and also the general gauge of auction success, such as the bid-to-cover ratio and the tail. A poor auction could rekindle the weaker dollar story, where a pair like USD/JPY could lead the dollar lower in a more difficult environment for risk."

"There doesn't seem to be a big catalyst for DXY to move outside a tight 98.80 to 99.40 range today. However, look out for any updates on US-China trade talks. Any good news is probably a dollar positive in the current environment."

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Samsung Electronics Forecasts Stronger-Than-Expected Q3 Profit on AI Demand Samsung forecasts Q3 profit of 12.1 trillion won, boosted by strong AI chip demand.
Author  Mitrade
Oct 14, Tue
Samsung forecasts Q3 profit of 12.1 trillion won, boosted by strong AI chip demand.
placeholder
Dollar Gains as US-China Trade Tensions Ease The U.S. dollar remained steady on Tuesday following a shift in President Donald Trump’s harsh stance on tariffs against China.
Author  Mitrade
Oct 14, Tue
The U.S. dollar remained steady on Tuesday following a shift in President Donald Trump’s harsh stance on tariffs against China.
placeholder
Asian Stocks Mixed as Commodities Pause and Yen Draws AttentionAsian equity markets struggled to close the week on a weak note Friday, influenced by ongoing losses on Wall Street that extended into early Asian trading.
Author  Mitrade
Oct 10, Fri
Asian equity markets struggled to close the week on a weak note Friday, influenced by ongoing losses on Wall Street that extended into early Asian trading.
placeholder
Oil Prices Hold Steady Amid Gaza Ceasefire and US Sanctions Oil prices held steady in early Asian trading on Friday following the announcement of a ceasefire between Israel and Hamas.
Author  Mitrade
Oct 10, Fri
Oil prices held steady in early Asian trading on Friday following the announcement of a ceasefire between Israel and Hamas.
placeholder
Bitcoin drops below $110K ahead of $22B options expiry; altcoins tumbleBitcoin fell below the $110,000 mark on Friday, heading for a steep weekly loss as nearly $22 billion in cryptocurrency options were set to expire. The drop also comes as traders await key U.S. inflation data that could influence the Federal Reserve’s policy outlook.
Author  Mitrade
Sept 26, Fri
Bitcoin fell below the $110,000 mark on Friday, heading for a steep weekly loss as nearly $22 billion in cryptocurrency options were set to expire. The drop also comes as traders await key U.S. inflation data that could influence the Federal Reserve’s policy outlook.
Related Instrument
goTop
quote