HONG KONG - Major currencies traded in tight ranges on Monday at the start of a busy week of central bank decisions and corporate earnings, while a pullback in oil prices and Treasury yields weighed on the dollar, Reuters reported. Oil prices eased, with Brent crude futures down nearly 2% at $114.50 a barrel after surging to a six-month high last week, following a Reuters report that Qatari mediators were in Tehran on Sunday as part of an effort to de-escalate regional tensions in coordination with the US.
Source: Reuters, Oct 26, via 96.5 WTOU
US Treasuries largely held onto gains from a recent safe-haven rally, as a tech-led selloff over concerns about AI spurred a rotation out of risk assets even as elevated oil prices kept inflation worries alive, Reuters reported. Yields on US 10-year notes were last down to 4.967%, while those on 30-year notes were at 5.299%, hovering near one-month lows. 'For the time being, it seems to point to the US bond market being in the driving seat for broader dollar performance,' said Ray Attrill, head of FX strategy at National Australia Bank, adding that compressing yield differentials had 'taken a little bit of the heat out of the US dollar.'
Source: Reuters, Oct 26, via 96.5 WTOU
The euro rose 0.15% against the greenback to $1.1218, amid relief that France was spared a Moody's downgrade despite social unrest, Reuters reported. Sterling strengthened 0.1% to $1.3379, the dollar index was little changed at 101.65, the Australian dollar was flat at $0.7031, New Zealand's kiwi traded 0.05% stronger at $0.5701, and the Japanese yen was steady at 156.92 per dollar.
Source: Reuters, Oct 26, via 96.5 WTOU
Five central banks in three days
Traders are positioned for policy signals from five central banks later this week, with the US Federal Reserve, the European Central Bank and the Bank of Japan expected to leave rates unchanged, while markets are pricing in possible increases from the Bank of Canada and the Reserve Bank of New Zealand, according to a TradersUnion summary of the Reuters reporting. The decisions fall between Wednesday and Friday, alongside earnings from hyperscalers Alphabet, Microsoft and Amazon that will also test the fragile AI-led market rally, Reuters reported.
Source: TradersUnion, Oct 26, summarising Reuters
For households in Canada and the Punjabi diaspora, the Bank of Canada's decision matters directly for mortgage and loan costs, and the dollar's direction affects remittances and import prices. No decision has been taken yet this week; what moves markets first may be the wording of the statements rather than the rates themselves, analysts cited in the coverage said.
Source: Reuters, Oct 26, via 96.5 WTOU