USD higher against all the major currencies with exception of Yuan - BBH

Research Team at BBH, notes that the US dollar gained against all the major currencies over the past week and also rose against many emerging market currencies. 

Key Quotes

“A notable exception was the Chinese yuan.  The yuan rose before the weekend, extended its advancing streak to four consecutive sessions, and in so doing, it snapped a six-week slide.

Last week's advance was only the second week since the start of May that the yuan moved higher.  The optimists claim the firmer yuan, and official comments suggesting capital outflows have eased, show that China does not seek a continued depreciation of the yuan.  The cynics warn that by allowing the yuan to rise ahead of the G20 finance ministers' meeting will deflect criticism about its foreign exchange policy, and that the decline will likely continue afterwards.

It is tempting to construct a narrative for the dollar's gains based on the string of stronger than expected US economic data.  However, the US economic calendar has been light in recent days, and the interest rate channel is quiet.  The implied yield of the September Fed funds futures increased by a single basis point.  The yield on the two-year Treasury note increased two basis points, while the yield on the 10-year was up less than a basis point.”