The dollar was nursing losses on Monday and kept near multi-week lows after Federal Reserve Chair Jerome Powell laid out a slower-than-expected path to rate hikes, while a storm lashing oilfields in the Gulf of Mexico lifted oil-exposed currencies. The greenback had dropped broadly on Friday, falling to a two-week low on the euro, after Powell managed to flag an exit from emergency monetary policy settings that did not spook markets or suggest a rush to raise interest rates. "It could be appropriate to start reducing the pace of asset purchases this year," Powell said in a speech, with employment the determining factor. But that wouldn't directly signal higher rates, he said, as hiking would need the economy to pass "a different and substantially more stringent test".
Japan's retail sales extend gains but COVID-19 challenges persist
Japan's retail sales rose for a fifth straight month in July, beating expectations as the consumer sector continued its recovery,
although a surge in Delta variant cases this month forced the government to widen state of emergency restrictions, which are now
threatening to hurt consumer spending and derail a fragile economic recovery. Retail sales advanced 2.4% in July from the same
month a year earlier, government data showed on Monday, slightly faster than economists' median forecast for a 2.1% rise in a
Reuters poll. It followed a 0.1% increase in June. The better-than-expected rise in retail sales in July came as authorities struggled to
get a defiant public to heed stay-at-home restrictions in major cities like Tokyo. The trade ministry data found strong demand for a
variety of items such as cars, clothing, general merchandise and food while fuel was helped by higher petrol prices.
Australian economy likely already slowing in Q2 before Delta downturn
Australia's economy was likely already slowing before wide-scale coronavirus restrictions shuttered swathes of business and jobs,
setting the stage for a vicious contraction this quarter. Latest data on gross domestic product (GDP) match the weakest market
forecast. The median call is for growth of 0.5% in the June quarter, while forecasts ranging from a 0.1% fall to growth of 1.2%. That
would be a further step down from 1.8% in the March quarter and a heady 3.2% in the last quarter of 2020. While consumer
spending and business investment were likely solid in the quarter, more of it was met by a flood of imports and a run down in
inventories rather than an increase in output, so trimming overall GDP.
Dollar slips after Powell embraces tapering, holds on rate hikes
The 10-year government bond yield (interpolated) on the previous trading day was 1.61, +1.00 bps. The benchmark government
bond yield (LB31DA, 10.5 years) was 1.60, -1.00 bps. LB31DA could be between 1.58 -1.63. Meantime, the latest closed US 10-year
bond yields was 1.31%, -3.00bps. USDTHB on the previous trading day closed around 32.63 Moving in a range from 32.51-32.58
this morning. USDTHB could be closed between 32.45-32.55 today. Meantime, The dollar slid on Friday after Powell indicated in a
highly anticipated speech that the U.S. central bank could start tapering its massive support to the economy could start by year's
end, which was not as fast as many in the market had assumed.
Sources : Bloomberg, CNBC, Investing, CEIC
