FX Update: As we await USD status, JPY poking higher on plunging long yields.

Focus this week: US yields and USD status, GBP status after last week’s trauma
Friday finished with a note of uncertainty on the USD status. Was the market simply unwilling to drive the USD over the edge to more strength until the Fed nomination situation is cleared up (Apparently both Powell and Brainard were spotted separately at the White House on Friday) or is this a sign that the greenback is rolling over? Besides the US treasury auctions this week noted above, we have Vice Chair Clarida out speaking today and the October CPI print on Wednesday is the economic calendar highlight for the week for the US.

Elsewhere, besides tracking whether the JPY is set to back up more aggressively on long yields dropping, we’ll watch whether GBP has merely suffered a one-off adjustment after the market misread the BoE (and the BoE provided confusing and confounding guidance) or whether sterling is set to trend lower. On that note, watching the 1.3410 area lows in GBPUSD and the 200-day moving average (below 0.8600) in EURGBP and up to the prior pivot high above 0.8650. I suspect a sustained weak sterling would require negative risk appetite. BoE Governor Bailey is out speaking later today, though the market may be reluctant to trust anything he says after last week’s traumatic meeting.

Table: FX Board of G10 and CNH trend evolution and strength
As noted above, the status of the US dollar very much up in the air after the slightly weaker close last week, while sterling has worked up quite a head of steam to the downside. Elsewhere, the JPY consolidation from its former remarkable weakness is nearly complete as we watch the key USDJPY pair for next steps as noted above.

Table: FX Board Trend Scoreboard for individual pairs
In the individual pairs, AUDUSD nominally tipped lower to close last week, but is near a pivotal stand-or-fail area near 0.7400. Elsewhere, the USDCAD flip to positive has similarly unfolded near key resistance in that pair around 1.2500. The JPY is claiming its first victims in EURJPY, NOKJPY, and GBPJPY, but this are not yet real trends yet as seen in the JPY status for the JPY broadly above.

Upcoming Economic Calendar Highlights (all times GMT)

• 1310 – Euro Zone ECB Chief Economist Lane to speak
• 1400 – US Fed Vice Chair Clarida to speak on monetary policy
• 1530 – US Fed Chair Powell to make opening remarks at conference on diversity
• 1700 – US Fed’s Harker/Bowman out speaking (neither is an FOMC voter in Dec.)
• 1700 – UK Bank of England Governor Bailey to speak
• 1850 – US Fed’s Evans (voter) to speak.
• 2030 – Australia Oct. NAB Business Conditions/Confidence
• 0500 – Japan Oct. Eco Watchers Survey