Dollar Gains as JPY Intervention Ends and JOLTS Focus Turns to 7.5 Million
Updated
Updated · ING Think · Aug 4
Dollar Gains as JPY Intervention Ends and JOLTS Focus Turns to 7.5 Million
3 articles · Updated · ING Think · Aug 4
Summary
The dollar started the week firmer, with ING seeing room for a near-term USD rebound after Japan’s latest yen-buying intervention appears to have run its course.
CFTC-based positioning had shown net-long USD bets at nearly 26% of open interest after July’s Fed meeting, but that overbought setup has become more balanced, reducing pressure for another sharp selloff.
US data now look decisive: ISM manufacturing surprised to the upside, while markets are watching June JOLTS openings below 7.5 million, ADP and Friday payrolls, where the consensus is 80,000 jobs.
Absent clearly weak labor data that revive dovish Fed repricing, ING expects EUR/USD to slip back below 1.150 and says markets may keep the chance of a September Fed hike above 50%—currently 65%.
Could a surprise plunge in Friday's US payrolls completely unravel the dollar's recent recovery and force the Federal Reserve into an emergency easing cycle?
Will the rare US-Japan currency intervention permanently halt the yen's slide, or is it merely a temporary fix before inevitable Bank of Japan hikes?
Why did the US Treasury choose to sell euros instead of dollars to rescue the yen, and what does this mean for European markets?