Market Brief, North America

The dollar is edging higher after US president Donald Trump said he will nominate Kevin Warsh to lead the Federal Reserve, a move that would place a long-time critic of expansive monetary intervention at the helm of the world’s most powerful central bank. Short-term Treasury yields are declining while long-term rates climb, equity futures are moving lower, and most major currencies are retreating against a resurgent greenback. Warsh served as a Fed governor from 2006 to 2011 and has deep ties to Wall Street, including a stint working with Stanley Druckenmiller. He is also married to the daughter of Ron...

Good morning. The almighty greenback is struggling to climb off a four-year low after US president Donald Trump said he didn’t think it had fallen too far, remarking that he could make it “go up or go down like a yo-yo,” but that it’s “doing great”—comments widely read as an endorsement of further weakness. A softer dollar could support US exports and raise import prices*, consistent with Trump’s aim of narrowing trade deficits, but it also risks generating market dislocations and raising borrowing costs if real-money investors redirect capital elsewhere. Treasury yields are holding firm, equity futures are setting up...

Foreign exchange markets are enjoying a brief period of respite, with most major pairs showing signs of mean reversion after the weekend’s sharp moves. The dollar is edging higher and measures of currency volatility are easing, even after President Trump issued fresh tariff threats against South Korea following similar warnings to Canada and Europe last week. Few expect the threats to be carried out, and many think the Supreme Court will place limits on such unilateral actions within the next month. Yield curves in Canada and the US are holding firm ahead of tomorrow’s central bank decisions, suggesting that investors...

Good morning. Foreign exchange markets are again facing treacherous conditions as a blizzard of macroeconomic and geopolitical risks hits the headlines. After a weekend filled with shocks—including an actual snowstorm—the dollar is succumbing to broad-based selling pressure as policy uncertainty spikes, equity futures are pointing to renewed losses at the open, and precious metals are going parabolic as investors pile into alternative currencies and asset classes. Trading desks are on intervention watch after the New York Federal Reserve reportedly conducted “rate checks” for the Treasury on Friday, fuelling speculation of coordinated action between Tokyo and Washington. We’re seeing no evidence...