The greenback retreated by -0.4% on Monday, erasing the symmetrical gains made on Friday (the $-Index fell back to 105.55, re-testing its April 25 low).

Everything is linked to the -spectacular- fluctuations in the $/Yen pair since last Thursday.
The yen had plunged to 157.7 at around 7 p.m. (French time), before plunging to 160 at around 3.30 a.m. on Monday, before falling back to 155.1 three and a half hours later (at around 7.00 a.m.).
By all accounts, the BoJ had just intervened to calm the fire.
The manoeuvre seemed to have been rather successful, as the yen even climbed back to 154.5 at around 9.30 a.m... but the $ climbed back to 156.8 at around 4.30 p.m., before falling back from 156.5 to 155.5 in a matter of seconds at around 6.45 p.m. (the Yen gained +1% against the Euro at 167.20, reducing its annual loss from -10 to -7.5%).

Against the euro, the dollar only lost 0.15% for most of the session, but this evening it is down by as much as 0.3% at around 1.0725, while the downturn has also become more marked against the pound, with a loss of 0.6% at around 1.2560.
However, no one is expecting a dove-like tone from Jerome Powell on Wednesday evening.
No rate changes are expected on this occasion, but investors will once again be looking to Jerome Powell to take a harder line on inflation.
The latest price indices - including the famous PCE - in the USA have rekindled fears of a later-than-expected monetary easing by the Federal Reserve, which may not materialize until November.
The big news of the first 4 months of the year is the week-by-week evaporation of rate cut expectations (from 7 to .... potentially zero) over the course of 2024, with a rate hike even garnering 33% of the votes for January 2025.

In Europe, conversations were animated by Moody's and Fitch's upholding of France's debt rating... which seems like a somewhat unexpected act of leniency (Standard & Poor's will give its verdict on May 31).

Although most European markets will be closed on Wednesday for the May 1st holiday, the week's economic agenda promises to be busy, culminating in the Fed's monetary policy meeting on Wednesday evening.

No rate changes are expected on this occasion, and employment figures, due out on Friday (the Fed must have some 'food for thought' on this subject), could also testify to the strength of the US economy, with 250,000 jobs expected to be created in April, compared with 303,000 in March.


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