Pressure On The Greenback Remains Ahead Of The Jobs Report And Powell, While European Bonds Stabilize

2025-03-07 07:00:00 ET

Summary

• The greenback's drop has been extended today against most of the G10 currencies, but not the growth-sensitive dollar bloc, which is underperforming today.
• The JPMorgan Emerging Market Currency Index is up 1.85% this week. It has risen in seven of this year's first ten weeks.
• The 10-year US Treasury yield is softer near 4.27% and is up 11 bps this week, which is the same as the 10-year Japanese government bond yield, which is now near 1.51%, the highest since 2009.

Overview

The greenback's drop has been extended today against most of the G10 currencies, but not the growth-sensitive dollar bloc, which is underperforming today. Still, ahead of the US jobs report and Fed Chair Powell's speech on the economic outlook, all the G10 currencies have appreciated by at least 1% this week. The Swedish krona's 6.7% rise tops the board, but the euro's 4.7% rally is its best weekly performance since 2009. The Turkish lira has the dubious honor of being the only emerging market currencies to have fallen today, though most of Latam markets have yet to open. The JPMorgan Emerging Market Currency Index is up 1.85% this week. It has risen in seven of this year's first ten weeks. The on-again off-again US tariffs is a bit like Woody Allen's complaint about a restaurant: the food was poor, and the servings were small. Most economists regard the tariffs as a risk to prices and growth and the uncertainty, and dare one say, whimsical nature of the announcements, seems to compound the worst elements, and in short run, exacerbate the trade imbalances....

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