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 price of WTI crude oil rose by almost a dollar yesterday to $48.79 – it’s sixth daily gain in the past seven – and prices in the futures market for 62% iron ore held above $60 per metric ton, both of which gave a boost to commodities currencies.
Oil rallied after energy ministers from Russia and Saudi Arabia – the world’s top two oil producing nations – said yesterday that plans to limit oil output would be extended by nine-months to the end of Q1 2018. View article >
There is good news for those in the US, Europe, Japan, Singapore, the UK, New Zealand, Taiwan, India, Mexico and just about anywhere at all, and that news is: that the Australian dollar is offering itself up for sale, in a buy 1 get all special.
If you’ve always dreamt of cuddling that koala, buying that Melbourne property or making payment for a lifetime supply of kangaroo wrestling gloves, now is the time to do it, the time to buy it, and the time to send that money. View article >
On Friday, Scotiabank – otherwise known as the Bank of Nova Scotia – outlined four factors that would drive Asian currencies higher in 2017.
Investors would “pour funds” into Asian markets on the following grounds:
1) If the Bank of Japan and European Central Bank continue with their stimulus programs, providing “accommodative” levels of liquidity to the economy.
With three consecutive months of positive core inflation in Japan, it is unlikely that the BoJ will be ending stimulus any time soon. View article >
The Malaysian ringgit has been one of Asia’s worst performing currencies for some time.
Between May-2013 and September-2015 the exchange rate for MYR/USD declined from highs at 0.338 to 0.223 – a 34% fall in the currency’s value.
Markets gave the ringgit some respite between October-15 and April-16, a period in which the ringgit clawed back around half of the aforementioned losses, but then selling against the US dollar began again, which accelerated following the result of November’s US election. View article >
The team at BMI Research – part of the Fitch group of companies – are maintaining their “slightly bullish” short-term view on the Taiwan dollar, mainly on technical grounds.
Over a longer-term, analysts at the firm are also positive on the Taiwanese currency, believing in a “gradual appreciation”, based upon a solid fiscal outlook in Taiwan and what they see as an undervalued currency generally. View article >
In recent days, the Philippine peso has done what other Asian currencies were unable to, and that’s to make gains against the US dollar in an environment of heightened geopolitical risk – an environment normally associated with a sell-off in emerging market currencies.
The peso gained again on Monday following up on its superb performance on Friday, in which PHP/USD posted its biggest gain in almost a year. View article >
Despite what has been described by CNBC as a “shocker” of a US jobs report on Friday and a US attack on Syria – a move certain to have geopolitical ramifications – the US dollar ended the week strongly.
Against the Japanese yen, the dollar fell toward 110.10 early in the day on news of a US missile strike on a Syrian airbase and, having recovered in the interim, fell again to that level following weak payrolls data. View article >
The ‘Greenback’ was bolstered by the Chair of the Federal Reserve, Janet Yellen, who made hawkish indications that the Fed would raising interest rates soon as she warned against keeping rates low for too long. While markets have been predicting it for a while, Yellen’s comments make is almost certain that the Fed will hike rates in December. View article >
The ‘Loonie’ was weakened by falling oil prices as the possibility of OPEC reaching an agreement to curb crude production began to be questioned by markets once again.
However CAD may recover some of its losses later today if the Canadian consumer price index rises as expected, with investors currently predicting that it will jump from 1.3% to 1.5% in October. View article >
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