North American FX Open - Trump rails against Usd's impact on US competitiveness

The DOLLAR has slumped to its lowest levels since March 21st, after former President Trump argued that the US unit's strength has hurt America's competitiveness and that the weakness of the YEN and the YUAN has been a trading advantage for Japan and China.

Usd/Jpy has fallen all the way down to 156.10 in response, its lowest level since June 12th, with traders also pondering the possibility of further Japanese intervention. Eur/Usd has shot up to 1.0945 on the remarks and now has the March high up at 1.0981 in its sights.

The Fed's Williams, speaking in the WSJ, said that the Fed is closer, but not yet ready to cut and that he is seeing broad-based declines in inflation. Williams added that the Fed will learn a lot between July and September and that the labor market remains strong.

Cable has been able to rise above the 1.3000 level for the first time in almost a year, en route to 1.3044. The Pound was helped by a slightly higher than expected UK CPI report for June, where headline, core and services y/y rates remained at 2%, 3.5% and 5.7% respectively. The data has cast further doubt on a possible first BoE rate cut in August.

Overnight the Australian July Economic Leading Index came in flat again, matching the upwardly revised print in June. The Melbourne Institute that compiles the data alongside Westpac, stated that the numbers pointed to "lackluster growth momentum continuing through the second half of 2024 and into early 2025.

Elsewhere, NZ Q2 CPI missed expectations at 0.4% q/q and 3.3% y/y and Bbg reported after while headline inflation is slowing, the report showed ongoing stickiness in domestic prices such as rents, insurance and local government levies that may concern the RBNZ.

Meanwhile in Japan, prominent LDP official and potential future PM Kono called on the BOJ to increase interest rates to boost the value of the yen and bring down energy and food costs.

US data today includes housing starts/permits and IP/CapU, while the Fed releases its latest Beige Book.

Fed speak comes courtesy of Barkin and Waller.

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