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Tag Archives: USD

Dollar Consolidates and Equities Follow Asia Lower

Overview: Escalating violence in Hong Kong and the continued fall in Chinese producer prices weighed on equities in Asia Pacific trading. The MSCI Asia Pacific Index has risen nearly 7% during the five-week rally and is off to a weak start this week. Hong Kong's Hang Seng fell around 2.6%, its biggest loss in three months, and China's CSI 300 was off 1.75%. Nearly all the local markets fell but Australia. European shares are also under pressure. The Dow Jones Stoxx 600 has also rallied...

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The Dollar Snaps Back after the October Pullback: Who has the Big Mo’ Now?

The US dollar had a solid week as the recovery from the October slide began.  We had a high conviction it was coming, but we thought the technical indicators gave scope for one more marginal new low, which in the end did not materialize.  It is difficult to say that there had been much new information or progress on the three macro issues that have captivated investors:  US-China trade, Brexit, and global economic outlook.  The UK is headed for the December 12 election, and that is the...

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Risk Appetites Satiated Ahead of the Weekend

Overview: The capital markets are consolidating the recent moves ahead of the weekend. Equities are paring this week's gains, though the Nikkei, which was closed on Monday, extended its advance for the fourth consecutive session. Despite the profit-taking today, the MSCI Asia Pacific Index rose for the fifth week. Europe's Dow Jones Stoxx 600 is snapping a five-day rally, but it is closing in on the fifth consecutive weekly advance. US shares are trading softer. It is up a modest 0.6%...

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Trade Optimism Boosts Sentiment but Weighs on the Dollar

Overview: Indications that a phase one agreement between the US and China would include rolling back some existing tariffs is boosting risking appetites, sending stocks higher, and pushing up yields. However, this appears to be simply a restating of China's views rather than a new breakthrough. The dollar is paring its recent gains. The MSCI Asia Pacific Index rose for the fifth time in six sessions to reach its best level since August 2018. Europe's Dow Jones Stoxx 600 is pushing higher...

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Markets Catch Collective Breath as Dollar Consolidates Yesterday’s Advance

Overview: Investors seem to be catching their collective breath today, and the global capital markets are consolidating recent moves. A notable exception is the Chinese yuan, which has continued to strengthen, and the dollar has slipped back below CNY7.0. Asia Pacific equities were mixed, and the four-day advance in the regional benchmark stalled today. That said, India has rallied to new highs. In Europe's Dow Jones Stoxx 600 is firm but struggling to maintain the upside momentum that...

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Animal Spirits Remain Animated

Overview: The prospects that the US-China deal could include some rolling back of existing US tariffs helped underpin risk appetites. After new record highs in the US S&P 500 and NASDAQ, Asia Pacific markets marched higher, and the MSCI Asia Pacific reached its highest level since August 2018. A small rate cut by China and catch-up by Tokyo, which was on holiday on Monday, helped extended the regional rally for the 14th session in the past 17. India, on the other hand, was an...

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November Monthly

Two main developments drove the foreign exchange market in October.  First, the market grew more confident that a hard Brexit could be avoided.  This drove sterling sharply higher.  It rallied from $1.22 on October 10 to a little above $1.30 on October 21 before doubts grew about the likelihood that Parliament will approve the new agreement.   The other development was a heavier US dollar after strong gains over the past three months.  The prospect that the US-China tariff truce...

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Investor Optimism Carries into the New Week

Overview: Investor optimism is reflected by the risk-taking appetite that is lifting equity markets and bond yields. With Japanese markets closed for a national holiday, the MSCI Asia Pacific Index was led higher by more than 1% gains in Hong Kong, Taiwan, South Korea, and Thailand. The regional benchmark advanced for the seventh session in the past eight and is approaching the year's high. European shares extended their rally, and the Dow Jones Stoxx 600 has risen in nine of the...

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Charts Suggest Scope for One More Push Lower for the Dollar before a Correction

The US dollar traded heavily last week, falling against all the major currencies but the Canadian dollar.  The Bank of Canada softened its neutral stance a few hours before the Federal Reserve signaled a pause after delivering its third rate cut to complete its midcourse correction. The Federal Reserve's real broad trade-weighted dollar index, which arguably is the single best measure when considering the economic impact of changes in foreign exchange prices, eased in October by a...

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Dollar Remains on the Defensive Ahead of Jobs Report

Overview: An unexpected increase in China's Caixin manufacturing PMI helped lift Asia Pacific equities after the S&P 500 stumbled yesterday amid concerns that there will not be a phase 2 in US-China trade negotiations. The MSCI Asia Pacific Index rose 4.3% in October, and with the help of gains in China, Hong Kong, Korea, and Taiwan began November with a gain. European stocks posting modest gains after the Dow Jones Stoxx 600 rose a little less than 1% last month. US shares are...

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