The euro advanced on Draghi’s talk of reflation. The pound took advantage of Carney’s change of mind. The Canadian dollar took advantage of higher oil prices and previous hawkishness from the BOC.
But the rest of the currencies did not go anywhere fast. AUD/USD was very cautious, taking one step forward, one step backward. And most importantly, the dollar gained ground against the yen. So perhaps this was a “risk on†move of sorts.
Not anymore – the dollar is falling everywhere
The US dollar is now lower across the board. It does not have anywhere to hide. USD/JPY dropped from the highs of nearly 113 to just under 112. AUD/USD is flirting with 0.77 and the currencies that already made gains are not letting go.
EUR/USD is settling above the Brexit high of 1.1425 and has already reached new highs. GBP/USD is around 1.30 despite all its problems and USD/CAD is taking the 1.30 quite seriously.
More dollar drops or is it about to turn?
Can this continue on and on? With the Japanese yen also jumping in to take advantage of the dollar’s demise, perhaps another round of gains is possible for the leading currencies.
Or perhaps the drop in USD/JPY is not the “smart moneyâ€. It may be the last move and could mark the turnaround. The yen could now enjoy safe-haven flows and gain against the dollar while the greenback is retreating elsewhere.
What do you think?
