ForexLive Asia-Pacific FX news wrap: Down, down, down for the hapless US dollar

• China’s gold exchange expands offshore with new contracts and vault in Hong Kong
• Japan 2-year JGB auction sees strongest demand since January
• Federal Reserve speakers Thursday include Barkin, Hammack and Kashkari
• US dollar still losing ground, EUR/USD pops above 1.1710
• Foreign investors became net sellers of Japanese equities for the first time since March
• China NDRC says Confident in minimizing uncertainty and negative impact of external shocks
• Iran leader Ayatollah Ali Khamenei not been seen publicly or heard from in nearly a week.
• European Central Bank speakers Thursday include Schnabel, de Guindos and Lagarde
• China’s finance minister says the world economic recovery faces unprecedented challenges
• China’s Premier Li: China will take forceful steps to boost consumption
• PBOC sets USD/ CNY reference rate for today at 7.1620 (vs. estimate at 7.1561)
• Japan’s Akazawa says Japan cannot accept 25% auto tariffs
• Bank of England Governor Bailey and Deputy Breeden are speaking Thursday, Rosen also
• US dollar still dribbling lower. ICYMI WSJ: Trump undermining Federal Reserve Chair Powell
• JP Morgan expects the USD dollar index, DXY, to fall by 5.7% in the next 12 months
• USD falling away a little on the Trump ” bid to undermine Fed Chair Powell” WSJ report
• Wall Street Journal: Trump considers naming next Fed chair early – bid to undermine Powell
• Deutsche Bank brings forward RBA rate cut to July
• Nomura sees Treasury rally ahead on rising growth fears
• Goldman Sachs sees double-digit upside for Chinese stocks, targets 4,600 on CSI 300
• Hong Kong’s central bank intervening to support the Hong Kong dollar
• Reports Iran not able to take uranium from nuclear enrichment facilities pre/post strikes
• US Feds order mortgage providers to “count cryptocurrency as an asset for a mortgage”
• J.P. Morgan tip a Federal Reserve rate cut in December
• Trump’s Mid East envoy Witkoff says its a red line if Iran tries nuclear enrichment again
• CIA confirms credible intelligence indicates Iran’s nuclear program severely damaged
• Forexlive Americas FX news wrap: US dollar stays on the defensive
• US stock markets finish nearly flat
• Trade ideas thread – Thursday, 26 June, insightful charts, technical analysis, ideas

The US dollar lost more ground today:

• EUR/USD hit levels last seen in September 2021

• USD/CNY dropped to lows not seen since November last year

• USD/CHF fell to its lowest level since 2011

The dollar weakened broadly, with AUD, NZD, JPY, GBP, and CAD all also firmer. Gold gained against the greenback.

The dollar has been trending lower almost throughout the first half of the year, down nearly 10%—its worst H1 performance in roughly four decades.

Today’s continuation move was catalysed by a Wall Street Journal piece with the blunt headline:

• “Trump Considers Naming Next Fed Chair Early in Bid to Undermine Powell.” (gated, I’ve a summary in the points above )

The report said Trump may accelerate the naming of a successor to Fed Chair Jerome Powell—potentially as early as this summer—which could allow a chair-in-waiting to begin shaping investor expectations well ahead of Powell’s term ending.

There was a brief retracement in FX after Japan’s Akazawa said Tokyo “cannot accept” a proposed 25% US auto tariff, but that blip didn’t last.

Elsewhere, Reuters reported that the US is allowing ethane to be loaded and shipped to China—initially a supportive development for risk sentiment. However, the catch is that it can’t yet be unloaded at Chinese ports. Presumably, someone’s working on a solution.

Finally, in Japan, a 2-year JGB auction drew the strongest demand since January, with a bid-to-cover ratio of 3.90, up from 3.77 in May. The average yield came in at 0.729%, with the lowest accepted at 0.735%. The auction tail widened slightly, suggesting investors are still adjusting their expectations around short-end policy risk.

This article was written by Eamonn Sheridan at www.forexlive.com.