The US dollar is stronger against the majority of the G10 currencies. The two exceptions stand out significantly. The Norwegian krone stands out as the strongest currency, potentially bolstered by the recent increases in oil prices. The yen stands as the other exception. Comments from BOJ Governor Ueda led to an increase in the swap market’s expectations for a rate hike later this month; however, officials provided little new information regarding the yen’s weakness. The greenback tested JPY160 without surpassing it, marking its strongest position since the intervention in late April. It is currently positioned slightly below it as the North American session approaches. Struggling to gain traction above $1.1650 yesterday, the euro faced selling pressure and dipped slightly below $1.1615 during the North American afternoon.

Monday’s low was slightly above $1.1605, and it has been retested today. As the North American session approaches, it appears that a low has yet to be established. Last week’s low was near $1.1585, while May’s low approached $1.1575, aligning with the (61.8%) retracement objective of the euro’s rally from the mid-March low (~$1.1410), which also marks the low for the year. Options for 1.3 billion euros at $1.1625 are set to expire today. The dollar rose against the yen, approaching JPY160 without actually trading at that level. It is the highest since the intervention on April 30. Recall that last March, the greenback breached JPY160, yet there was no significant intervention. The dollar remains close to JPY160, despite comments from BOJ Governor Ueda that appeared to indicate a potential hike this month. The swaps market is currently reflecting an expectation of nearly 22 basis points for a hike, an increase from the 19.5 basis points observed in the previous three sessions. The market continues to exhibit caution regarding intervention, with options for $660 million at JPY160 set to expire today.

Sterling performed more favourably than the euro in recent trading sessions. It neared the upper end of its recent range against the dollar, briefly surpassing $1.3480 yesterday and approaching the pre-weekend high. Sterling frayed the 20-day moving average (~$1.3470 today) but did not manage to settle above it. It has returned to a softer position today, marking a session low just prior to the opening of the European markets, slightly above $1.3435. Options for nearly GBP415 million at $1.3440 are set to expire today. The Canadian dollar has rebounded from three-day lows; however, it remains susceptible to further fluctuations. The US dollar reached nearly CAD1.3855 in the European morning and was sold to about CAD1.3815 in early North American turnover yesterday, before recovering toward CAD1.3845.

Last week’s high was near CAD1.3870, but the greenback posted a key downside reversal afterwards. It appeared to be the kind of price action one would associate with a top following a month-long rally. Still, it has edged to almost CAD1.3860 today, and a push above CAD1.3870 could signal CAD1.3900 next, while the April high was closer to CAD1.3950. The Australian dollar traded firmly, remaining within Monday’s ~$0.7135-$0.7190 trading range yesterday. It tested and maintained support around $0.7170 in North America. The Aussie is trading within yesterday’s range today.