Greenback goes even lower
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Why is the US dollar falling and how is it boosting the Aussie?
The US dollar goes even lower, pushing the Aussie to a new multi-year high. The NAB Business Survey shows capacity utilization is still uncomfortably high, just adding more fuel to that February rate hike expectation from the RBA. The Fed is just a day away, along with major tech earnings. And a partial US government shutdown this week seems even more likely now. It's Wednesday, it's the 28th of January, 2026. It's the morning call from NAB. Good morning. Well, the U.S. dollar has fallen even further today, getting down below 96.16 on the DXY. That's pushed the Aussie dollar up over 0.8%, over 69.7 U.S. cents. The euro and the yen are up over 0.7% as well. Oil has climbed more than 2%, 2.25% for WTI, a little less for Brent.
Brent now at 67 a barrel. Not much bond movement for US bonds. In the UK, though, 10-year yields are up three basis points to 4.52%. Canada, they rose by four basis points to 3.41% ahead of the Bank of Canada later on today. Aussie 10-year yields have risen to 4.84%. And US equities are higher again, 0.5% added to the S&P, getting close to an all-time high. The NASDAQ up almost 1%. ahead of tech earnings this week, whereas in Europe, the DAX is down a little. The Eurostoxx 50 is up 0.6%, and a 1.5% rise in spot gold. But comics gold is down a little, so no new highs today. And silver down over 7.5%. It's volatile, isn't it? Here's NAB's Taylor Nugent. So, Taylor, yesterday we made the mistake. We said the Aussie dollar was at a three-year high when it was at 69.4%, whereas Ray quickly emailed, missed the second decimal place, quickly emailed to say, well, that's not true.
It reached 69.42% in September 2024. But we've eclipsed that now, haven't we, presumably, with today's moves?
Yeah, that's right.
What’s driving the broader FX moves in the yen, euro and pound?
So the Aussie up again, a beneficiary of some continued broad US dollar weakness and touching a near three-year high up around 69.81 overnight and not far from those levels now as I look at the screen. And so that's the highest since February 2023. um it's you know part of a broad-based uh us dollar slide that we've we've seen continue overnight we know you know you talked yesterday about you know a large part of this being kind of a yen story and a yen out performance story that was certainly true late friday and And to a lesser extent through the course of of Monday. But, you know, in the last 24 hours, you know, the yen has been, you know, very much just among a G10 pack that is is moving against a weaker US dollar.
And there's some, you know, some new levels being being reached with these markets. These sorts of moves, the euro now up around its strongest level since June 2021, the pound around its highest since October 2021, and the dollar on the DXY also around its lowest since March 2022. So, you know, some new levels being reached there and, you know, not too much marginal news, I would have to say, to kind of feed this trend. This slide in the US dollar, we did get the Japanese finance minister, Katayama, talking alongside the G7 summit, saying that officials will continue to take action in line with the US-Japanese FX agreement. But kind of, you know, as I say, it wasn't as yen-specific a story over the last 24 hours as it was late last week.
So the question is why? I'm not necessarily expecting you to have an answer to that. And will it continue? It's curious, isn't it?
Yeah, well, you know, I think we know what the themes are in terms of that, you know, the concern around the US dollar and the potential diversification incentives there. And I think that, you know, when you look at geopolitics, political uncertainty, you know, the situation in the US domestically at the moment, all of those things, I think, are you know, all there in the background and have, you know, found some expression in a slide in the US dollar over the last couple of days, even in the absence of kind of a direct catalyst for that move overnight.
We'll come back to the States in a second. Let's talk about the NAB business survey from yesterday, first of all. So a rise in business conditions and confidence, so a better result than expected.
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