The US dollar is generally weaker, with the Canadian dollar exhibiting the most pronounced weakness among the G10 currencies. The swaps market has nearly fully discounted a BOJ hike for later this month, while the greenback continues to hover near, but below, JPY160. Japan’s finance minister has maintained a firm stance, reiterating that the country is prepared to take action as needed. Poor earnings from Broadcom late yesterday have negatively impacted the chip sector in Asia, resulting in a decline of over 1% in Nasdaq futures. The market-sensitive US May jobs data are set to be released tomorrow; however, the threshold for any alteration in Fed policy during Warsh’s inaugural meeting this month remains considerably elevated. The euro attained a two-week peak at the close of May, approaching $1.1685, before retreating below $1.1600 during the North American session yesterday.

In the final fortnight of May, the asset experienced intraday trading below the $1.16 mark on multiple occasions; however, it managed to maintain a closing price above this threshold until yesterday, when it finally closed below it. Nonetheless, there was a lack of follow-through selling, and the euro rebounded to nearly $1.1635 during European trading hours. A close above yesterday’s high, a little below $1.1635, would contribute to a more positive sentiment, in anticipation of tomorrow’s US jobs data. The dollar exhibited a cautious upward trend against the yen in North America yesterday. After European markets closed, the greenback was pushed to JPY160.10, as if the mischievous market were challenging verbal intervention by the US Treasury, reminiscent of earlier this year or in Tokyo today.

The market exhibits signs of apprehension, with the dollar dipping to nearly JPY159.60 during the local session before swiftly rebounding. However, it has yet to surpass JPY160, a level at which options totalling $2.7 billion are set to expire today. Finance Minister Katayama reiterated that officials are in contact with Washington and are prepared to take action. The US has maintained a subdued stance, contrasting with its activity in late January. Sterling continues to fluctuate within last Friday’s trading range (~$1.3410-$1.3485). The lower range held firm, paving the way to test the upper limit. Yesterday’s high reached just over $1.3470, with the 20-day moving average around $1.3460. Sterling has only briefly settled above this level since May 11.

Concerns regarding risk appetite, coupled with a challenging macroeconomic environment, have led to a decline in the Canadian dollar, marking its lowest point since early April. The greenback approached CAD1.39 yesterday and reached CAD1.3925 today. The year’s peak was noted at the end of March, just over CAD1.3965. It settled slightly above the upper Bollinger Band (approximately CAD1.3910 today). The Australian dollar declined past yesterday’s low of approximately $0.7130, reaching nearly $0.7120 today, marking a five-day low. It bounced back, likely aided by the trade surplus in April, but stalled around $0.7140. Options for A$625 million at $0.7155 reach their expiration today.