Foreign exchange news covering currency rates, dollar strength, forex trading, and currency market developments.
The Reserve Bank of India mobilized $72.85 billion through its USD-INR Forex Swap facility, closing it early on August 31 due to strong demand. Concurrently, foreign exchange reserves rose nearly $10 billion in the week ended August 15, approaching an all-time high of $728 billion.
ING analysts argue that U.S. Treasury Secretary Scott Bessent's support for joint yen intervention signals a potential turning point, citing the currency's significant undervaluation. They contend that durable appreciation requires Japanese structural reforms and Bank of Japan rate hikes to retain capital domestically.
Wall Street analysts are increasing bets on a weakening U.S. dollar and rising gold prices following the Treasury Department's announcement to double long-term bond repurchase auctions. Major averages closed higher Friday, with the Dow Jones advancing 0.9% and the S&P 500 rising 0.4%, while oil prices also rose for a weekly gain.
Citi strategists argue that recent coordinated U.S.-Japan foreign exchange interventions signal an informal "currency alliance" linking monetary policy with broader national security goals. The analysis contends this coordination aims to stabilize the yen and influence Japanese reflationary policies, while dismissing rumors of a formal "Mar-a-Lago accord" reshaping the international monetary system.
BCA Research argues investors should sell the U.S. dollar against currencies like the euro, yen, and won as American real interest rates decline and foreign portfolio inflows weaken. The firm contends that current-account surpluses in these nations will support their currencies while U.S. equities underperform.
The US dollar hit a three-month low, on track for its worst week in August, after the Trump administration's bond buyback pledge failed to stabilize markets. Gold and precious metals rallied amid discussions of a debasement trade, while observers compared the strategy to Japanese policies that prolonged currency weakness.
Robin Brooks argues that the US Treasury's debt buyback plan risks triggering a dollar devaluation spiral similar to Japan's yen crisis. He contends this financial engineering ignores fiscal deficits, potentially morphing a debt crisis into a currency crisis as markets demand higher risk premiums.
The won strengthened into the 1,300-per-dollar range on Friday, continuing its recovery from a low of 1,559.2 in early July. Private bankers advised investors to buy dollars gradually rather than all at once, citing potential for further won gains.
The U.S. dollar index fell to a three-month low of 98.46 on Thursday, marking its weakest reading since mid-May. The currency hovered near 98.55 following the intraday dip as bets against Federal Reserve rate hikes continued to fade.
The Indian government revised the Foreign Trade Policy to allow exporters to invoice and receive payments in Indian rupees, aiming to reduce reliance on the US dollar. The article explains that while most countries can now use rupees, specific rules apply within the Asian Clearing Union and for sensitive goods involving Iran.