Author: Joel Wright
Joel has been involved in the markets for the past 10 years. During that time he’s worked in market analysis teams in London, in the financial technology sector in Singapore – working mostly with automated trading tools and algorithms – and most recently he’s been planning FX risk hedging for an SME in Bangkok. Joel has a first-class honours degree in Financial Services and currently writes about foreign exchange for several global businesses.
You can get in touch with Joel via email here or via the contact page
To the glee of those holding Australian currency or AUD denominated assets, in recent weeks the Australian dollar has reversed its second-quarter trend.
Having fallen almost 5.5% between late March and mid-May, largely because of a tumble in the price of Australia’s largest export, iron ore, the AUD/USD exchange rate has spent much of the last month rallying. In fact, as of writing a little before 5am GMT on Friday, with the exchange rate for AUD/USD at 0.755, the pair has clawed back roughly half of the aforementioned loss. View article >
“We have to warn our people about the dangerous situation of the property market,” said Hong Kong’s Financial Secretary, Paul Chan, today.
In an interview with Bloomberg’s Haslinda Amin, Chan expressed concern about a potential housing market correction in Hong Kong, which is currently the world’s most expensive city for property. In 2016, Hong Kong stood atop Knight Frank’s Prime International Residential Index with USD 1 million buying a home averaging just 20.6 square metres. View article >
A rally in the US dollar prompted by moderately hawkish Fed speakers pushed emerging market Asian currencies such as the Thai baht, Philippine peso and Malaysian ringgit lower on Tuesday. Asian currencies from developed economies but which nonetheless remain second tier and under the “emerging” umbrella, such as the Korean won and the Taiwan dollar, also declined.
Charles Evans, President of the Chicago Fed, said on Tuesday that US economic fundamentals are good and that he expects inflation to rise, although he did hint that the Fed could wait until December before raising interest rates again. View article >
The market received surprising trade data from Japan on Monday. What had been expected as a ¥43 billion trade surplus for the month of May was actually a deficit of ¥203 billion. April’s surplus had been ¥480 billion.
The data came as a surprise to many given that the Japanese economy had seemingly been picking up steam in recent months.
Japan’s currency, the yen, is considered the FX world’s premier safe haven in part because of the country’s consistent ability to run a trade surplus – a feature which was most evident between the mid-1980s and 2008 and which makes Japan stand out from other developed economies such as the US, UK and Euro area. View article >
On Monday, US ratings agency Moody’s cut its credit ratings on Australia’s four largest banks by one notch to Aa2 from Aa1. The banks – Westpac, ANZ, Commonwealth Bank and National Australia Bank – retain their “investment grade” status but are no longer top-rated by the agency.
Less well known, smaller banks that were downgraded include Bendigo and Adelaide Bank and Credit Union Australia. View article >
Having been one of Asia’s worst performing currencies for some time, the Malaysian ringgit has turned a corner recently; a small corner, but a corner nonetheless.
The ringgit is now clearly trending upwards against the US dollar, albeit on low volatility, and is up nearly 6% since lows in mid-November. One ringgit now buys more than $0.233 and MYR/USD remains close to its seven-month high, posted last week. View article >
The Bank of Japan (BoJ) stuck with the status quo on Friday, choosing to preserve extreme monetary policy stimulus with the goal of boosting Japanese growth and inflation.
Inflation, which has been the bane of central bankers in Japan for much of the past two decades, remains low. Statistics Japan said in May that annualized headline inflation, or all-inclusive inflation, is running at just 0.4% in the country and that inflation excluding the volatile fresh food and energy components is non-existent (0.0%). View article >
A combination of this morning’s FOMC meeting and weaker than expected GDP data pushed the New Zealand dollar down against a broad group of currencies on Thursday.
Data released by Stats NZ on Thursday morning showed that GDP rose 0.5% in the first quarter, which although higher than a 0.4% print in the fourth quarter, was comfortably below market expectations for 0.7%. View article >
This morning, investors learned that the Westpac-Melbourne Institute (WMI) survey of Australian consumer sentiment fell last month by 1.8% and remained in “pessimist” territory for the seventh consecutive month. The survey is seen by many analysts as an important gauge of the Australian public’s willingness to spend, which is itself an important driver of the domestic Australian economy.
In spite of the gloom painted by the WMI survey, the Australian dollar never wavered this morning, and as of writing at 05:25 GMT, it remains in the mid-75s versus the US dollar, still above yesterday’s close of 0.7536. View article >
Very early this morning in Asia, Bank of Canada (BOC) Council member Carolyn Wilkins lit a fire under the Canadian dollar with her remarks to an audience at the Asper School of Business in Winnipeg, in which she hinted at a possible rate hike by the BOC. Wilkins said that “as growth continues…the Governing Council will be assessing whether the considerable monetary policy stimulus presently in place is still required.”
Since the 2008/09 financial crisis, the Bank of Canada, like the central banks of most other advanced economies, has been forced to adopt an especially easy, or loose, monetary policy. View article >