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Summary U.S. dollar up 8.6% so far in 2022Euro set for 6.2% annual lossLONDON/SINGAPORE, Dec 30 (Reuters) - The dollar was on track for its biggest annual gain since 2015 on Friday, in the last trading day of a year dominated by Federal Reserve rate hikes and fears of a sharp slowdown in global growth. In thin trading, the dollar index was down around 0.1% on the day at 103.900 . The euro was flat on the day at $1.066 , on track for a 6.2% annual loss versus the dollar, compared to last year's 7% drop. The Bank of Japan's ultra-dovish stance has seen the dollar gain 14.5% versus the yen so far this year, in the yen's worst performance since 2013. The onshore yuan was set for its worst annual performance in 28 years, hurt by dollar strength and a domestic economic slowdown.
Dollar powers through, eyes best year since 2015
  + stars: | 2022-12-30 | by ( Rae Wee | ) www.reuters.com   time to read: +4 min
The U.S. dollar index , which measures the greenback against a basket of currencies, has surged more than 8% this year, the most since 2015. "I expect the king dollar to lose its crown and the dollar to make a more decisive turn by the middle of next year," Bank of Singapore currency strategist Moh Siong Sim said. It has fallen more than 13% year to date, its worst performance since 2013. The single currency had dipped below parity against the dollar earlier this year for the first time in almost two decades. The kiwi , which has fallen more than 7% year to date, the worst since 2015, slipped 0.31% to $0.6330.
The U.S. dollar index , which measures the greenback against a basket of currencies, has surged more than 8% this year, the most since 2015. But expectations that the central bank may not have to raise rates as high as previously feared have caused the greenback to unwind its towering rally. Conversely, an ultra-dovish Bank of Japan in the face of a hawkish Fed, has spelled pain for the Japanese yen . Policymakers from the European Central Bank and the Bank of England have signalled more rate hikes to come next year, in a bid to tame inflation even at the risk of hurting their economies. "The issue is whether the rapid reopening (in China) triggers fresh waves in some countries or regions, and that may lead to fresh restrictions.
Markets are weighing the impact of China's rapid loosening of its strict COVID-19 rules with a surge in new infections. The dollar also fell against the Swiss franc to as low as 0.9208, the lowest level since March 31. Against a basket of currencies, the U.S. dollar index fell 0.479% to 103.840, having climbed 0.18% in the previous session. But analysts warned against reading too much into price moves amid low trading volumes as markets head into the new year. The aussie rose 0.70% versus the greenback at $0.678, while the kiwi rose 0.68% against the dollar at $0.635.
SINGAPORE/LONDON, Dec 29 (Reuters) - The dollar slipped on Thursday after rising in the previous session, with investors on edge at the end of the year as initial optimism over China's reopening fizzled. The yen was last 0.56% higher at 133.72 against the dollar. That followed a 0.73% fall on Wednesday which saw the yen hit a one-week low of 134.50. It climbed as high as $1.206 earlier in the session but gave up some of its gains. Against a basket of currencies, the U.S. dollar index fell 0.08% to 104.26, having climbed 0.18% in the previous session.
SINGAPORE/LONDON, Dec 29 (Reuters) - The dollar slipped on Thursday after rising in the previous session, with investors on edge at the end of the year as initial optimism over China's reopening fizzled. The Japanese yen was last 0.64% higher at 133.66 against the dollar. That followed a 0.73% fall on Wednesday which saw the yen hit a one-week low of 134.50. Analysts warned against reading too much into price moves amid low trading volumes as markets head into the new year. Against a basket of currencies, the U.S. dollar index fell 0.11% to 104.23, having climbed 0.18% in the previous session.
SINGAPORE, Dec 29 (Reuters) - The dollar pared some gains on Thursday after riding long-end U.S. Treasury yields higher overnight, though investors remained on edge going into the year end as initial optimism over China's reopening fizzled. The speed at which the country has scrapped COVID rules has overwhelmed its health system and sparked concerns about the spread of the virus. The Japanese yen was last roughly 0.6% higher at 133.71 per dollar, languishing near a one-week low of 134.50 that was hit in the previous session. Sterling rose 0.1% to $1.2030, but was similarly not far off its three-week trough of $1.1993 hit last week. Meanwhile, the yield on the benchmark U.S. 10-year Treasury last stood at 3.8637%, after rising to a more than one-month high of 3.8920% overnight.
After hitting a one-week high against the yen on Wednesday, which saw the dollar touch 134.40, the greenback hit a session low against the yen on Thursday. The dollar last fell 1.050% versus the yen to 133.065. The dollar also fell against the Swiss franc to as low as 0.9208, the lowest level since March 31. Against a basket of currencies, the U.S. dollar index fell 0.23% to 104.100, having climbed 0.18% in the previous session. The aussie was last 0.28% versus the greenback at $0.676., while the kiwi last rose 0.55% versus the greenback at $0.634.
SINGAPORE, Dec 29 (Reuters) - The dollar steadied on Thursday after riding long-end U.S. Treasury yields higher overnight, as initial optimism over China's reopening fizzled. Following China's removal of its quarantine rule for inbound travellers beginning Jan. 8, countries such as the United States, Japan and India said they would require COVID tests for travellers from China. Sterling rose 0.19% to $1.2040, but was similarly not far off its three-week trough of $1.1993 hit last week. The uncertainty over the global economic outlook, along with mounting worries about a recession in the U.S., saw the two-year Treasury yield , which typically moves in step with interest rate expectations, slip overnight. Meanwhile, the yield on the benchmark U.S. 10-year Treasury last stood at 3.8656%, after rising to a more than one-month high of 3.8920% overnight.
China will stop requiring inbound travellers to go into quarantine on arrival starting Jan. 8, the National Health Commission said on Monday, even as COVID cases spike. At the same time, Beijing downgraded the regulations for managing COVID cases to the less strict Category B from the top-level Category A. "There seems to be no let-up in the pace of relaxing COVID restrictions despite the surge in COVID cases in the mainland," said Christopher Wong, a currency strategist at OCBC. "It's worth remembering that the dollar rose in each of the past four years in January. "While ... (the) policy tweak has added uncertainty to the BOJ outlook, we continue to lean toward BOJ policymakers making no further policy adjustments through the end of 2023," said analysts at Wells Fargo.
The personal consumption expenditures (PCE) price index rose 0.1% last month after climbing 0.4% in October. Excluding the volatile food and energy components, the PCE index gained 0.2% after increasing 0.3% in October. The so-called core PCE price index rose 4.7% on a year-on-year basis in November after increasing 5.0% in October. The Canadian dollar also benefited from data showing that the Canadian economy grew by 0.1% in October versus September, with another 0.1% increase in GDP seen likely in November, Statistics Canada data showed. Against the yen, however, the dollar rose 0.4% to 132.82 yen .
Sterling was just a touch higher at $1.2038 having slumped to a three-week low of $1.1993 overnight. The number of Americans filing new claims for unemployment benefits increased less than expected last week, pointing to a still-tight labour market, data released on Thursday showed. BOJ SURPRISEThe yen was marginally lower at 132.39 per dollar on Friday, but was on track for its third largest weekly gain this year of more than 3%. "Japan's inflation figures will be closely scrutinised from here on," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. Elsewhere in Asia, the Chinese offshore yuan rose slightly to 7.0038 per dollar.
Yen rises in cautious calm after BOJ policy tweak
  + stars: | 2022-12-22 | by ( Rae Wee | ) www.reuters.com   time to read: +3 min
The greenback, which rose 0.6% against the yen in the previous session, had failed to meaningfully recoup its 3.8% slump following Tuesday's news. "The BOJ opened the door, obviously, for further unwinding of its super-loose policies," said Sean Callow, a senior currency strategist at Westpac. Against the euro , the yen steadied at 140.27, while trading at 159.73 per pound . Sterling rose 0.14% against the dollar to $1.2102, after having slid 0.85% overnight. "In a world where risk sentiment is still very fragile, currencies whose countries have a twin deficit are at risk compared to others."
[1/3] Examples of Japanese yen banknotes are displayed at a media event in Tokyo, Japan, November 21, 2022. Those positions took a hit when Tuesday's Bank of Japan policy shift allowed 10-year yields to almost double to 0.47%. On Wednesday the long end of Japan's yield curve actually rallied, with 30-year yields down 2.5 bps to 1.545%. "The 10-year yield is still very low ... maybe they will invest in the 20-year." In Australia, where Japan is also the largest foreign player in the bond market, 10-year yields are up about 20 bps.
In a move explained as seeking to breath life back into a dormant bond market, the BOJ decided to allow the 10-year bond yield to move 50 basis points either side of its 0% target, wider than the previous 25 basis point band. But the central bank kept its yield target unchanged and said it will sharply increase bond buying, a sign the move was a fine-tuning of existing ultra-loose monetary policy rather than a withdrawal of stimulus. "Today's step is aimed at improving market functions, thereby helping enhance the effect of our monetary easing. "This change will enhance the sustainability of our monetary policy framework. It's absolutely not a review that will lead to an abandonment of YCC or an exit from easy policy."
Shares tanked, while the yen and bond yields spiked following the decision, which caught offguard investors who had expected the BOJ to make no changes to its yield curve control (YCC) until Governor Haruhiko Kuroda steps down in April. But the central bank kept its yield target unchanged and said it will sharply increase bond buying, a sign the move was a fine-tuning of existing ultra-loose monetary policy rather than a withdrawal of stimulus. Reuters GraphicsAs widely expected, the BOJ kept unchanged its YCC targets, set at -0.1% for short-term interest rates and around zero for the 10-year bond yield, at a two-day policy meeting that ended on Tuesday. The 10-year Japanese government bond (JGB) yield briefly spiked to 0.460%, close to the BOJ's newly set implicit cap. Kuroda has repeatedly said he saw no need for the BOJ to tweak YCC, including taking immediate steps to address the side-effects such as the distortion it was creating in the bond market.
Bank of Japan makes surprise policy tweak
  + stars: | 2022-12-20 | by ( ) www.reuters.com   time to read: +8 min
ATUSHI TAKEDA, CHIEF ECONOMIST, ITOCHU ECONOMIC RESEARCH, TOKYO:"Today's move reflects the BOJ's determination not to alter its yield cure control policy. CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:"I think the move was certainly unexpected, to say the least. MOH SIONG SIM, CURRENCY STRATEGIST, BANK OF SINGAPORE:"They've widened the band, and I guess that came earlier than expected. CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE:"The timing of the policy tweak is a surprise, though we have been expecting the move to come in 2Q 2023. "The tweak may seem modest but is significant for a central bank that has held dovish for a long time.
Bank of Japan reviews yield-curve control policy
  + stars: | 2022-12-20 | by ( ) www.reuters.com   time to read: +4 min
Dec 20 (Reuters) - The Bank of Japan has slightly loosened the shackles on its 10-year yield target and said it will review its yield-curve control policy, surprising financial markets and sending the yen sharply higher. However, it is only a first step and yield-curve control (YCC) remains in place, as does negative rate strategy. CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:"I think the move was certainly unexpected, to say the least. MOH SIONG SIM, CURRENCY STRATEGIST, BANK OF SINGAPORE:"They've widened the band, and I guess that came earlier than expected. CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE:"The timing of the policy tweak is a surprise, though we have been expecting the move to come in 2Q 2023.
[1/2] A Japanese flag flutters atop the Bank of Japan building under construction in Tokyo, Japan, September 21, 2017. "The BOJ decided to modify the conduct of yield curve control to improve market functioning and encourage a smoother formation of the entire yield curve, it said in a statement. As widely expected, the BOJ kept unchanged its yield curve control (YCC) targets, set at -0.1% for short-term interest rates and around zero for the 10-year bond yield, at a two-day policy meeting that ended on Tuesday. But it decided to allow the 10-year bond yield to move up and down 50 basis points around the 0% target, wider than the previous 25 point band. Kuroda has repeatedly said he saw no need for the BOJ to tweak yield curve control, including taking immediate steps to address the side-effects such as the distortion it was creating in the bond market.
[1/2] Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. The yen was last 0.4% stronger at 136.19 per dollar, after jumping more than 0.5% to a high of 135.78 earlier in the session. The Japanese government will consider revising next year a joint statement it signed with the BOJ in 2013 that commits the central bank to meeting a 2% inflation target as soon as possible, sources told Reuters. That policy stance and the resulting interest rate differentials with the rest of the world have caused the yen to plunge more than 15% this year. A slew of central bank meetings last week saw the BoE, the U.S. Federal Reserve and the European Central Bank (ECB) each raising rates by 50 basis points, with the Fed and the ECB delivering hawkish messages and pledging more hikes ahead, even at the risk of hurting growth.
Turnover surges as funds rush to exit private equity stakes
  + stars: | 2022-12-19 | by ( Rae Wee | ) www.reuters.com   time to read: +5 min
Conceived as an illiquid but lucrative method of accessing unlisted companies, private investments are typically structured into funds run by buyout firms. Investment firm Hamilton Lane says an unprecedented $224 billion in private equity stakes have been offered in the secondary market this year to mid-November. Others want to deploy their capital elsewhere - a sign that private equity funds are no longer so highly regarded. The need to sell to rebalance can occur when, as this year, private equity funds have outperformed public markets. On paper, plenty of private investments, which are typically valued quarterly, appear to have done very well this year.
[1/2] Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. The yen was last 0.34% stronger at 136.24 versus the dollar, after having jumped more than 0.5% to a high of 135.78 earlier in the session. The Japanese government will consider revising next year a joint statement it signed with the BOJ in 2013 that commits the central bank to meeting a 2% inflation target as soon as possible, sources told Reuters. That policy stance and the resulting interest rate differentials with the rest of the world have caused the yen to plunge more than 15% this year. A slew of central bank meetings last week saw the BoE, the U.S. Federal Reserve and the European Central Bank (ECB) each raising rates by 50 basis points, with the Fed and the ECB delivering hawkish messages and pledging more hikes ahead, even at the risk of hurting growth.
[1/2] Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. The yen was last 0.6% stronger at 135.91 per dollar, after having touched a high of 135.80 earlier in the session. Prime Minister Fumio Kishida is aiming to make the BOJ's 2% inflation target a more flexible goal by revising its decade-old joint statement with the central bank, Kyodo news agency reported on Saturday. The current statement commits the BOJ to achieving its inflation target "at the earliest date possible", and the BOJ has steadfastly stuck to its dovish monetary policy. A slew of central bank meetings last week saw the BoE, the Federal Reserve and the European Central Bank (ECB) each raising rates by 50 basis points, with the Fed and the ECB delivering hawkish messages and pledging more hikes ahead, even at the risk of hurting growth.
Dollar gains after Fed meet, BOE and ECB in focus
  + stars: | 2022-12-15 | by ( Alun John | ) www.reuters.com   time to read: +3 min
The dollar was also stronger versus the Swiss franc and Norwegian crown after their respective central banks kicked off a bumper day of central bank meetings, with Swiss rates rising 50 basis points and Norway's 25 basis points, as expected. The dollar traded at 9.8284 Norwegian crowns, up 1.3% on the day and the euro was up 0.6% at 10.434 crowns. The dollar rose 0.3% to 0.9279 francs, but pared its gains after the head of the Swiss National Bank said the central bank had been selling foreign currencies. "The Fed set the tone for central bank meetings this week and we're expecting others to go straight down the line. There is a possibility of a four-way split with different policy markers voting for no change or increases of 25, 50 and 75 basis points.
Dollar falters as investors challenge Fed's hawkishness
  + stars: | 2022-12-15 | by ( Rae Wee | ) www.reuters.com   time to read: +3 min
The kiwi fell 0.05% to $0.6456, though it was similarly not far off the six-month peak of $0.6513 it hit this week. The 50 bp increase marked a downshift after four consecutive 75 basis point rate hikes. Against a basket of currencies, the U.S. dollar index was last 0.02% higher at 103.68, after touching a six-month low in the previous session. Fed funds futures also show that markets are expecting U.S. rates to peak just under 5% by May next year. Elsewhere, the Aussie was last 0.05% lower at $0.6860, while the dollar slipped 0.06% against the Japanese yen to 135.40.
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