Outlook: We get US trade today, but it’s the Beige Book that will grab attention. Richmond Fed Barkin sets the stage with a remark to the FT that a 4% Fed funds rate would not surprise him. Mester and Brainard also speak today. Critics can scan the Beige Book seeking anything resembling a dove, but to no avail. The Bank of Canada meets today and is expected to do 75 bp. Tomorrow, Mexico reports August CPI, likely to feed expectations of the central bank matching the Fed with 75 bp but not until the next policy meeting on Sept 29.

We get a fresh Atlanta Fed update today. Remember last week it was a stunning 2.6% (from 1.6%).

The ECB policy meeting on Thursday is going to be a doozie. Expectations are still running high for front-loading with 75 bp, but even if it’s 50 bp, tightening is the stance via other methods, specifically the asset purchase program (APP), still in high gear, and PEPP, plus July’s TPI (Transmission Protection Instrument) aiming to limiting divergences in bond spreads. Surprisingly, sentiment is more negative than indicators validate, as Econoday points out: “… not only is the ECB now much more focused on tackling inflation than bolstering growth but the Eurozone economic activity has actually been outperforming market expectations anyway.” This is a vote for 75 bp. 

The euro is not (so far) matching yesterday historic low. While the euro is still hanging on by its fingernails, we have other record lows in other currencies. Sterling fell 1.1443, a 29-month low.

More dramatically, dollar/yen rose over ¥144 for the worst reading since August 1998. It’s about a 20% depreciation for the yen and sure enough, faint whispers of intervention are in the air. FinMin Suzuki said recent yen moves are "somewhat rapid and one-sided," a bit more pointed than other recent comments. “We’ll keep watching the markets with a high sense of urgency, and if the moves continue we’ll respond as needed.” This is still far off a line in the sand and expresses more concern for the pace of the move than the actual level (which feeds Japanese inflation a little but benefits exports by more).

We haven’t had BoJ intervention since Fukushima in 2011, a special case. Before that, it was 1998 and the rate was about 147.65. But critics say to intervene now would be to spit in the ocean because it’s the relative rates forcing this move and Japan can more easily and cheaply change that by getting rid of the rate cap.

The dollar/renminbi is also overly firm. See the chart. Breakouts like this are abnormal and lead to tears.

The most noteworthy thing about the FX landscape is the euro consolidating while other currencies are catching up, so to speak. There seems to be some underlying firmness in the euro that is inexplicable, unless we think that fending off recession as much as possible via debt funding is viable. This is also what seems to be happening in Britain, too, despite the Conservatives’ usual abhorrence of public debt. We have not reached emergency levels yet but breakouts like these can end badly when big traders start closing out positions and set off landslides.

SPX


This is an excerpt from “The Rockefeller Morning Briefing,” which is far larger (about 10 pages). The Briefing has been published every day for over 25 years and represents experienced analysis and insight. The report offers deep background and is not intended to guide FX trading. Rockefeller produces other reports (in spot and futures) for trading purposes.

To get a two-week trial of the full reports plus traders advice for only $3.95. Click here!

This morning FX briefing is an information service, not a trading system. All trade recommendations are included in the afternoon report.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD hits two-week tops near 1.0500 on poor US Retail Sales

EUR/USD hits two-week tops near 1.0500 on poor US Retail Sales

The selling pressure continues to hurt the US Dollar and now encourages EUR/USD to advance to new two-week peaks in levels just shy of the 1.0500 barrier in the wake of disappointing results from US Retail Sales.

EUR/USD News
GBP/USD surpasses 1.2600 on weaker US Dollar

GBP/USD surpasses 1.2600 on weaker US Dollar

GBP/USD extends its march north and reclaims the 1.2600 hurdle for the first time since December on the back of the increasing downward bias in the Greenback, particularly exacerbated following disheartening US results.

GBP/USD News
Gold maintains the bid tone near $2,940

Gold maintains the bid tone near $2,940

The continuation of the offered stance in the Greenback coupled with declining US yields across the board underpin the extra rebound in Gold prices, which trade at shouting distance from their record highs.

Gold News
Weekly wrap: XRP, Solana and Dogecoin lead altcoin gains on Friday

Weekly wrap: XRP, Solana and Dogecoin lead altcoin gains on Friday

XRP, Solana (SOL) and Dogecoin (DOGE) gained 5.91%, 2.88% and 3.36% respectively on Friday. While Bitcoin (BTC) hovers around the $97,000 level, the three altcoins pave the way for recovery and rally in altcoins ranking within the top 50 cryptocurrencies by market capitalization on CoinGecko. 

Read more
Tariffs likely to impart a modest stagflationary hit to the economy this year

Tariffs likely to impart a modest stagflationary hit to the economy this year

The economic policies of the Trump administration are starting to take shape. President Trump has already announced the imposition of tariffs on some of America's trading partners, and we assume there will be more levies, which will be matched by foreign retaliation, in the coming quarters.

Read more
The Best Brokers of the Year

The Best Brokers of the Year

SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025