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Tag Archives: USD

The Charts: China Allows CNY to Rise Against the Dollar as the Greenback Advances Against Almost Everyone Else

The US dollar gained against the major currencies, except for the Swiss franc, which strengthened to its best level against the euro since April 2017.  It has risen for six of the past seven weeks, and the week that it fell, it slipped less than 0.1%.  The franc's strength could be a sign of fear in the market, but the other so-called safe-haven currency, the Japanese yen was the weakest of the majors, falling almost 0.65%.  Similarly, the dollar rose against most emerging market...

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China and the UK Surprise in Opposite Directions

Overview:  Helped by new record highs in the US, global stocks are moving higher today. Nearly all the markets in the Asia Pacific region advanced and the seventh consecutive weekly rally is the longest in a couple of years. Europe's Dow Jones Stoxx 600 is at new record highs and appears set to take a four-day streak into next week. US shares are trading firmly.  Since the end of last September, the S&P 500 has fallen in only three weeks. A shockingly poor UK retail sales report is...

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Markets Look for New Cues with US-China Trade Pact Signed

Overview: The global capital markets are calm today as investors await fresh trading incentives. New record highs in the US equity indices gave Asia Pacific stocks a lift, though China and Taiwan were notable exceptions. Europe's Dow Jones Stoxx 600 is firm new record highs set last week.  US equities are edging higher in Europe. Benchmark bond yields are little changed. European yields are a little lower, while the US 10-year is steady around 1.78%. UK short-term rates are steadying...

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Phase 1 Trade Deal Shifts Terrain of US-China Rivalry

Overview:  News that US tariffs on China will remain until through at least the November US election and continued US attempts to stymie China (e.g., more curbs on Huawei under consideration and stepped up efforts to force it to cut subsidies to business) have taken some momentum from the push into risk assets.  The MSCI Asia Pacific Index snapped a four-day advance today, with only Australian equities among the large regional markets able to sustain upticks.  Europe's Dow Jones Stoxx...

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China was a Currency Manipulator for a Few Months

Overview:  The leaked US decision to lift the currency manipulator designation on China was the latest fodder fueling the new record highs in the S&P 500. The risk-taking appetite helped extend the rally in the MSCI Asia Pacific Index for the fourth consecutive session. Europe's Dow Jones Stoxx 600 is little changed and trying to snap a two-day decline. US shares appear directionless in the European morning. Benchmark yields are slightly softer in Europe and US Treasuries, with...

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Dismal Data Undercuts Sterling and Boosts Chances of a Rate Cut

Overview: There are two big stories today. The first is the large scale protests in Iran after the government admits to accidentally shooting down the commercial airliner amid the fog of war. The market impact seems minimal but fueling speculation that this, coupled with the economic hardship related to the US embargo, could topple the regime. Second, the UK reported that the economy unexpectedly contracted in November. With the backdrop of recent dovish commentary by a few officials,...

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Technicals: The Underlying Signal

The heightened geopolitical risks and then the unwind drove the price action in the capital markets last week, the first full week of the new year.  These are the kind of markets that whipsaw even the most experienced and nimble among us.  We review the recent price action and technical condition of some of the major currencies and other instruments that are frequently driven by the same macro forces, or influence the foreign exchange market with the hope of being able to identify the...

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Jobs Friday: Asymmetrical Risks?

Overview:  The first full week of 2020 is ending on a quiet note, pending the often volatile US jobs report.  New record highs US equities on the back of easing geopolitical anxiety is a reflection of greater risk appetite that is evident across the capital markets.  Asia Pacific equities mostly rose today, though Chinese shares and a few of the smaller markets saw small losses.  The MSCI Asia Pacific Index rose about 0.2% on the week, the sixth consecutive weekly advance.  European...

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Animal Spirits Roar Back

Overview:  The S&P 500 recovered from a 10-day low to reach a new record high, which set the tone for the Asia Pacific and European markets today.   The MSCI Asia Pacific Index jumped by the most in a month with the Nikkei's 2% advance leading the way.  More broadly, the markets in Taiwan, South Korea, Hong Kong, India, and Thailand all rose more than 1%.  Europe's Dow Jones Stoxx 600 was up a milder 0.5%, but its third successive advancing session has seen new record highs.  US...

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Hopes of De-Escalation Help Markets Stabilize

Overview: The Iranian retaliatory missile strike on Iraqi-bases housing US forces initially sparked a dramatic risk-off response throughout the capital markets. The muted response by the US coupled with signals from Tehran that it had "concluded" its proportionate measures saw the markets retrace the initial reaction. It was too late for equities in the Asia Pacific region, and several markets (Japan, China, Korea, Malaysia, and Thailand) fell more than 1%. Europe is faring better,...

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