USD extending weakness while the markets focus on the US/Corea conversations, USA

The US dollar (USD) is broadly weakening in Wednesday’s NA session, extending the fall driven by the IPC on Tuesday and retreating most of its profits related to trade between the US and China since the beginning of the week, says Shaun Osborne, head of Strategy of FX de Scotiabank.

USD under generalized pressure per second session

“The markets seem to be responding to media reports on conversations between the US and Korea earlier this month that covered the issue of exchange rates and seemed to strengthen the suspicions of the market on an US administration that seems to lean towards a preference for a weaker dollar. The KRW has risen more than 1% in the day and the Asian currencies lead the profits in FX. The G10 currencies suggests a slight risk aversion, with a remarkable superior performance of the JPY and ChF and a relative lower performance of the AU and CAD. “

“The broadest tone in asset markets is confirming the FX signals, since the indices of European shares are gently contributed, together with the futures of US shares. In the bond markets, the performance of the US 10y is being withdrawn from the maximum of Tuesday around 4.50% and the 2y seems to be stabilized with a notable congestion around 4.00%. The signals of the crude The WTI struggles to extend its recent profits above $ 63/BBL while copper rises within a descending channel at the midpoint of its much broader range.

“For Wednesday, the US publications calendar is empty, leaving the focus focused on the statements of the members of the Fed and the programmed appearances of Waller, Jefferson, Daly and Goolsbee. The tone is critical since we continue to notice the clear divergence between the speakers of the Fed that maintain a bias towards the ‘patience’ They incline to a dovish approach with a clear bias towards additional cuts of fees.