March 17th, 2014
There was still an important element of caution on Monday as Ukraine uncertainties continued to deter aggressive positions. There was some relief that there had been no immediate surge in tensions following Crimea’s vote to leave Ukraine and join the Russian Federation and risk appetite overall was initially slightly stronger.
Equity markets rallied and USD/JPY moved to the 101.85 area while a widening of the Chinese yuan trading band did not have a major impact. There was a rally in commodity currencies with AUD/USD pushing to a peak around 0.9080 after finding support below 0.9000. Read the rest of this entry »
March 14th, 2014
EUR/USD was subjected to selling pressure late on Thursday following ECB President Draghi’s comments which were more forceful than recent testimony. In particular, he stated that the bank was ready to combat deflation and watching the Euro very closely with the currency’s value an increasingly important factor in policy deliberations. A rapid EUR/USD decline to the 1.3850 area complicated the near-term technical picture and increased uncertainty. Read the rest of this entry »
March 13th, 2014
Antipodean currencies were the main focus overnight as NZD/USD rose sharply following an expected rate hike from the Reserve Bank of New Zealand. The latest Australian labour-force data was also stronger than expected with an employment increase of over 47,000 for February after a revised 18,000 gain the previous month as unemployment held steady at 6.0%. AUD/USD had already rallied strongly from a trough around 0.8920 and spiked above 0.9000 for a peak around 0.9100. Read the rest of this entry »
March 12th, 2014
Risk conditions started to deteriorate during the New York session on Tuesday with renewed concerns surrounding the outlook for Chinese growth amid speculation over increased bond defaults and worsening credit crunch. USD/JPY initially retreated to the 102.80 area with a sharp drop in copper prices helping to put sustained downward pressure on AUD/USD.
The risk aversion trend was generally sustained on Wednesday with Asian equity markets dropping sharply and USD/JPY was unable to regain the 103 level. Risk and geo-political issues tended to dominate, especially with no significant economic data releases. Read the rest of this entry »
March 11th, 2014
There were calmer market conditions in Asia on Tuesday as risk conditions stabilised and AUD/USD managed to find support above 0.9000 despite further vulnerability in industrial commodity prices.
As expected, the Bank of Japan left policy on hold following the latest policy meeting with no further measures to boost quantitative easing. The central bank was slightly more optimistic surrounding the economy, notably on capital spending. There are still important uncertainties over retail spending given the sales tax increase in April which will keep the central bank on high alert. Read the rest of this entry »