Marketwatch North America

Daily Insights
June 26, 2024

Yesterday a pair of Fed officials pushed back on rising market expectations of near-term rate cuts. Fed Governor Bowman reiterated the Fed’s view that it’s not yet appropriate to begin rate cuts as inflation is expected to remain elevated for some time. Recent data has shown inflation easing, leading to increased speculation of rate cuts this year. But until the data demonstrates ‘sustainable’ inflation near the 2% target, the Fed is not inclined to act. Bowman also indicated a willingness to raise the target range if progress on inflation reverses.

Fed Governor Cook struck a similar chord by indicating she sees little change to inflation for the remainder of the year, a not-so-subtle hint on the Fed’s outlook on rates.

The Fed comments helped lift the dollar. The U.S. Dollar Index is +0.37% at 105.996 after trading as high as 106.13 earlier in the day. The dollar is universally higher against the majors, primary gains: +0.93% vs. BRL, +0.69% vs. MXN & NOK, +0.68% vs. SEK, +0.57% vs. NZD, +0.50% vs. JPY, and several sub-0.50% gains.

USD/JPY traded at 160.62 today, nearly a 40-year high. Japan’s minister Kanda indicated the BoJ was watching rates ‘with a high level of urgency’ which strengthened the JPY back to 160.00. But dollar bulls used the dip to add to long USD/JPY positions, lifting the pair to 160.59.

U.S. New Home Sales for May were 619k, below April’s 698k, an 11.3% decline MoM.

Economic Calendar

USD - New Home Sales
AUD - MI Leading Index m/m
USD - Crude Oil Inventories
AUD - CPI y/y
EUR - German GfK Consumer Climate
CHF - UBS Economic Expectations
GBP - CBI Realized Sales
CHF - SNB Quarterly Bulletin
CNY - CB Leading Index m/m
USD - Bank Stress Test Results
JPY - Retail Sales y/y

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 160.627 159.663
eur/usd 1.07179 1.06659
gbp/usd 1.26933 1.26272
aud/usd 0.66886 0.66358
usd/cad 1.37039 1.36503
eur/gbp 0.84534 0.8433
usd/mxn 18.3306 18.0645
Equities and Commodities
S&P 500 5478.85
NASDAQ 19781.7
DOW 39023.5
GOLD 2297.91
SILVER 28.75

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.