Strong Aussie, rising Yen, less mighty dollar
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Why is the US dollar weakening while the Aussie hits multi‑year highs?
Uh weakening US dollar, a stronger yen, precious metals still hitting highs, and then the Aussie, the strongest it's been for quite a while. There's a lot to talk about in market moves. Before we look at the week ahead with the NAB Business Survey today, Australia's quarterly CPI tomorrow. And will Trump really impose a hundred percent tariffs on Canada? Welcome back from the long weekend. It's Tuesday, it's the twenty seventh of January twenty twenty six. It's the morning call from NAB. Good morning. Well, uh a few stories from last week. Uh first of all, precious metals, silver is up almost fifteen percent on Friday with another new high. Comics gold was up two point four percent, also a high, whilst oil fell slightly.
The other story was the yen, it rose one point one percent on Friday, so it's climbing back. And US dollar weakness, it fell naught point six percent on Friday. It's just about ninety seven on the DXY from ninety nine point four, a little over a week ago. So it's down one point two. Year to date. The Aussie climbed 0.6% on Friday, got up to 69.4 US cents, which I think is the highest it's been since 2023. Uh bond yields were a little weaker on Friday, equities higher, the S P climbed 0.6%, the NASDAQ a bit more, and here NAB's Gavin friend. So let's start with the yen and the US dollar. Uh the yen regaining a bit of ground, the dollar. Now at a four month low and there's talk about whether there's actually some sort of coordinate coordinated action that's been going on between Japan and the New York Fed.
Any truth in that, do you think?
Certainly the Japanese morning Zoofield. Certainly the Japanese are serious about intervention. They've talked about intervention in the bond market to try and cap yields. That was the BOJ. And then you've had a couple of days of worrying they're worrying about the level of the yen. And to your headline there that we've had a big rise in the yen, a decline in the dollar. and has fallen, five big figures, three point three percent or so over the two days. Um and that takes it down to uh you know some some levels we haven't seen for some time. And attendant to that, there's been a broader move against the dollar. You mentioned the Aussie up point four of a percent to sixty nine thirty three. You're correct the highest level since um February
2023. So that's a three-year high. Meanwhile, the Kiwi, the Euro, Sterling, the Swiss, they're all performing well. They're all up half a percent or so on the day. And all of those are really running now to their highest level against the dollar. Since the middle of September, that was the previous dollar low that we saw in the rundown after the big heavy sell-off after April. So they're They're all acting together. The Aussie is outperforming over the over the course of the last couple of days. But of course, the focus to your central question, I think, is the yen. That's giving you know that's it's giving the lower dollar a bit of a shove. And the intervention rumours came around uh late on Friday. There were rumors of price checking in the Asian session on Friday, and then towards the end of the European.
Session. It's all, you know, conjecture at the moment because the New York Fed that would be acting uh for the BOJ, if that were the case, on behalf of the moth, uh wouldn't make a public comment about it. But, you know, th th this is widely reported in the media that they were they were checking prices. And so, you know, this has given the whole thing if it was just about the BOJ or the Japanese authorities acting Um kind of a move that we've seen so far, you know, five big figures against the fundamentals, the reasons why the yen is was being sold, you know, uh previously, would reassert themselves. You know, this this is not going to end unless Japan changes policy. However, because we're now thinking or markets are thinking, is the Fed involved in this as well?
Then obviously gives it a lot more of a of a concern if if and and d behind that is this speculation that maybe the Trump administration wouldn't mind a lower dollar.
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