Asian Currencies Steady as Fed Delivers Hawkish Rate Cut; Aussie and Rupee Under Pressure 
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ADB Approves $400 Million Loan to Boost Ease of Doing Business in the Philippines 
BOJ’s Noguchi Calls for Cautious, Gradual Interest Rate Hikes to Sustain Inflation Goals 
U.S. Dollar Slides for Third Straight Week as Rate Cut Expectations Boost Euro and Pound 
Fed Rate Cut Signals Balance Between Inflation and Jobs, Says Mary Daly 
S&P 500 Slides as AI Chip Stocks Tumble, Cooling Tech Rally 
BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes 
Global Markets Slide as Tech Stocks Sink, Yields Rise, and AI Concerns Deepen 
Modi and Trump Hold Phone Call as India Seeks Relief From U.S. Tariffs Over Russian Oil Trade 
RBA Holds Rates but Warns of Rising Inflation Pressures 
Brazil Holds Selic Rate at 15% as Inflation Expectations Stay Elevated 
Fed Near Neutral Signals Caution Ahead, Shifting Focus to Fixed Income in 2026 
Japan Weighs New Tax Breaks to Boost Corporate Investment Amid Spending Debate 
Gold Prices Hold Firm as Markets Await Fed Rate Cut; Silver Surges to Record High 
New RBNZ Governor Anna Breman Aims to Restore Stability After Tumultuous Years 
The FOMC would like to see more hard data which indicate that the US economy is really heading for a growth rate of 2% and that inflation is accelerating towards the 2% target as well.
Yesterday’s release of the FOMC minutes brought some relief for the Mexican peso, which had been under pressure in the earlier part of yesterday’s session.
However, we fear that the peso trades as a proxy for deteriorating emerging market sentiment, due to its low cost of carry, correlation with the oil price and low transaction costs.
The dollar came under pressure after the minutes of the Fed’s July monetary policy meeting, released on Wednesday, showed that policymakers were still divided over the need to raise interest rates this year.
Given moves in the likes of BRL in recent days, one wonders whether EMFX markets are going to take a breather over the coming days from what has been a blistering rally since the Brexit vote.
In our view investors should wait for Yellen’s speech in Jackson Hole next week before deciding upon a direct course of action, but in any case it makes sense to tighten stops on long EM positions. All good things come to an end eventually.
It seems to be clear that it would probably take the FOMC until December to gather sufficient hard data on growth, the labor market and inflation to hike the Fed funds rate. The Fed wants to be 200% sure before taking another rate step. The dollar has come under slight pressure after the release of the minutes and will probably not receive sufficient support.
USDMXN has declined from the highs of 19.5174 to the current 19.0791 levels, loss of almost 7.4% in just two and half months and technicals are indicative of further dips in the days to come.
