The US dollar Fell Across The Majors Board During Morning Trade Here
GBP/USD rose to nearly 1.1600 as US dollar weakness combined with news out of the UK of further stimulus to be put in place by new Prime Minister Truss. Truss is setting up a program to keep households’ annual energy bills below £2,000, at a cost of around £130bn. This equates to circa 5% of GDP in subsidies for household energy bills. This will stoke further and faster Bank of England rate hikes.
There was little relevant idiosyncratic news for other majors. CAD, AUD, NZD, CHF all dropped against the USD. Gold surged above USD1725 at one stage but has since retraced some of its gain.
USD/JPY lost ground early towards 140.25. Yen-supportive comments from Japan’s finance minister Suzuki followed, met by the markets with yen selling driving USD/JPY back to early highs circa 140.55. Suzuki not getting much respect from the yen-trading crowd.
The People’s Bank of China set the reference rate for USD/CNY above 6.9 today. The Bank announced yuan-supportive policy on Monday afternoon China time but the setting today was the weakest for the CNY since August 25 2020.