Monday , February 17 2020
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Tag Archives: AUD

Sterling Hammered to New Lows, Yen Pops

The British pound has been hammered to fresh lows just above $1.3115.  The euro is moving toward GBP0.8500.  The immediate catalyst is three-fold.  First, one of the UK's largest property funds has moved to prevent retail liquidation. Second, the BOE reversed an earlier decision on the capital buffer for banks, which is tantamount to easing policy by boosting the banks' lending capability.  Third, UK services PMI was weaker than expected.  Nearly 90% of the responses were...

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Dollar Consolidation may Continue until Jobs Data

The US dollar turned in a mixed performance in the week after the UK decision to leave the EU.  There was an acute market reaction for a couple of days, but the disruption to the financial system was not major. Officials and investors feared worse. The initial line of defense, central bank swap lines were barely used. The Bank of Japan was the only central bank to draw on the Fed's lines, and even then, the amount was inconsequential ($2 million). Outside of sterling,...

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Markets Head Quietly into the Weekend

The US dollar is little changed ahead of what will likely be a thin North American session due to the US holiday on Monday.   The Australian and New Zealand dollars are attracting flows, ostensibly as a place to park funds, even though tomorrow's Australian election looks a dead heat.     Falling yields seem to be offsetting the rise in equities as a driver for the yen, which is the strongest currency today, gaining 0.6% against the dollar.   The greenback was turned...

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Fragile Calm Ahead of Quarter-End

No fundamental development can compare with the UK decision to leave the EU. It has set off a chain reaction whose outcome is still far from clear.   Sterling is firm, alongside most of the major and emerging market currencies today.  Sterling narrowly edged above yesterday's highs to reach almost $1.3425 before encountering selling pressure.  Equity fund managers may find themselves over hedged into quarter-end, may have to buy sterling today or tomorrow.   This may...

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Markets are Anxious, Yen Soars

The US dollar is higher against the major currencies but the Japanese yen and the New Zealand dollar.  The dollar fell to new two-year lows against the yen to JPY103.55 before bouncing in the European morning back to JPY104.40.  The Kiwi was helped by better than expected Q1 GDP.  The euro and sterling are within yesterday's ranges.  The euro has been able to resurface above $1.13 since Monday.  Bids have been found a little below $1.12.  UK reported better than expected...

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Greenback Proves Resilient

The US dollar traded heavily in the first few days of last week as investors continued to respond to the poor employment report.   However, Yellen's willingness to defer judgment while noting the underlying economic strength, JOLTS and the initial jobless claims, coupled with the ongoing anxiety over the June 23 UK referendum helped the dollar recover in the second half of the week.   Although four central banks meet and there are numerous economic reports, there are two...

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Dollar Retains Firm Tone, but Yen and Swiss Franc maybe Drawing Support from Brexit Fears

The US dollar weakened in the first half of the week as participants continued to react to the shockingly poor jobs report and shift in Fed expectations.  However, it recovered smartly yesterday and is seeing some modest follow through buying today.   The main exceptions today are the Japanese yen and Swiss franc, the only major currencies besting the dollar today.  For the week, it is the dollar-bloc and franc that have maintained weekly gains.    And those dollar-bloc...

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Greenback is Mostly Firmer, but Yen is Firmer Still

The US dollar is posting modest upticks against most of the European currencies and the Canadian and Australian dollars. However, it has fallen against the yen and taken out the recent low, leaving little between it and the May 3 low near JPY105.50.  The New Zealand dollar though is the strongest of the major currencies; gaining 1.5% following the RBNZ's decision to leave rates on hold, and signal of little urgency to cut again in the near-term.   In recent days, the odds...

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Currencies Broadly Stable, but Greenback is Vulnerable

The foreign exchange market is quiet.  The euro remains confined to the narrow range seen on Monday between $1.1325 and $1.1395.  We continue to look for higher levels near-term as the drop from May 3 (~$1.1615) to May 30 (just below $1.11) is corrected.  A move above $1.1420 would likely spur more buying.   The dollar has surrendered yesterday's gains against the yen that had lifted it to almost JPY108.00.  The pullback has been limited to the JPY106.75 area.  The...

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Yen Bucks Heavier Dollar Tone

The Japanese yen is the major currency not to be gaining against the US dollar.  Emerging market currencies, save the Chinese yuan, are also advancing against the greenback today.   The yen rose 3.5% against the dollar last week, and rising equities and commodities are weighing on the yen.  The dollar rose to almost JPY108 in Asian trading is consolidating in the European morning.   The JPY108.30 area is the first retracement objective, which is a little above the...

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