Mon, Jan 18, 2021 @ 13:18 GMT
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Currency Markets Slumber

US dollar remains under pressure Currency markets had a reasonably volatile session overnight, but after the dust settled were almost unchanged. The dollar index fell to 89.20 in intraday trading, a near two-year low, but finished near its opening level, near 89.45. The index has beat a modest retreat to...

Dems Win Georgia Senate Elections, What That Means US Dollar And CNH

On Monday, we discussed the potential outcomes of the Georgia Senate races and what it means for the US Dollar. With Democratic candidates Raphael Warncok and Jon Ossoff winning the elections, the Senate is now split 50/50, which means any votes in the Senate that are tied will be...

USDCNH Dives to Fresh Lows; Bears Could Catch a Breather in Short Term

USDCNH stretched its seven-month old sell-off to the new year, diving to a fresh 2 ½ -year low of 6.438 on Monday. Although the bearish market structure, which develops below the Ichimoku Cloud and the simple moving averages (SMAs), keeps sentiment negative, with the falling momentum indicators also keeping the...

Sterling Dives Again on Brexit Deadlock and Coronavirus Spread

Sterling opened the week broadly lower after Brexit trade negotiations missed yet another deadline. Additionally, European countries rushed to ban travel from UK as coronavirus infections worsened. Aussie and Kiwi are trailing as the next weakest on mild risk aversion. On the other hand, Dollar, Yen and Swiss Franc...

PBoC left 1-yr LPR unchanged at 3.85%, USD/CNH recovers in consolidation

China's PBoC left the one-year loan prime rate (LPR) unchanged at 3.85% today. The five-year LPR was held at 4.65%. These benchmark lending rates for corporate and household loans were kept unchanged for the eight straight months. Some economists saw that with the economic recovery on the right track,...

USD/CNH: Strong Down Trend Holds

USD/CNH fell 9% from the top of 2020 as investors expected the recovery of the economy after the pandemic. Investors sold the safe-haven assets dollars to other assets. In addition, the strong China economic data also support the CNH. On the economic front, China's industrial production rose 7.0% on year...

Aussie Tumbles Mildly on Trade Tension, Markets Mixed Elsewhere

Australian Dollar weakest broadly today after China intensified the trade tensions with banning Australia's coal imports. Markets are relatively mixed elsewhere, with some softness in both Yen and Swiss Franc. The Pound's rebound is fading as for now, there is no confirmation on whether there would be a Brexit...

USD/CNH staying in consolidation after strong China data, down trend in force

China's industrial production rose 7.0% yoy in November, up from October's 6.9% yoy, matched expectations. Retail sales rose 5.0% yoy, up from October's 4.3% yoy, but missed expectation of 5.1% yoy. Auto sales rose 11.8% yoy while household appliances sales rose 5.1% yoy. Communications equipment sales even jumped 43.6%...

Markets Returning to Risk-on Mode, Dollar Vulnerable to More Downside

Dollar and Yen are back under some selling pressure today, as markets seem to be returning to risk-on mode. NASDAQ hit another record high overnight, and Asian markets are generally trading in black. The greenback's weakness is also seen as it's vulnerable to breaking a key psychological level against...

China CPI fell for first time since 2009, USD/CNH to break 6.5 psychological support

China's CPI dropped -0.5% yoy in November, well below expectation of 0.0% yoy. That's also the first annual decline in more than a decade since October 2009. Though, it's driven by one off factor as pork supply improved from the disruption African swine fever. At the same time, demand...

Strong Chinese PMIs Boost Yuan

The Chinese yuan is steady in the Thursday session. Currently, USD/CNY is trading at 6.5468, up 0.09% on the day. China PMIs show expansion China PMIs have looked sharp this week. The latest release was Caixin Services PMI on Thursday, which accelerated to 57.8, marking a 5-month high. The manufacturing and...

Dr. Copper Giving Clues about USD/CNH?

The price of cooper is said to be a sign of economic growth and weakness. Hence, it is nicknamed Dr. Copper because when the economy is weak, one just needs to look to “the Doctor” to see if it is getting better.  It is used as a predicter of...

Week Ahead: A Joe Biden Presidency? Return of Brexit and Coronavirus to the Headlines

With the lack of economic data this week, expect US Presidential drama to be in play this week. As of Friday afternoon, it appears that most media outlets are ready to call Joe Biden the 46th President of the United States.  However, don’t expect current President Donald Trump to go...

USD/CNH: Bearish Run Shows No Signs Of Stopping Yet

USD/CNH has dropped 1.4% so far in October and is on track for a fifth straight monthly decline. The strength in Chinese yuan is reinforced by the contrast in coronavirus situation in China and the rest of the world. While the Chinese economic activity is gradually returning to normal,...

China’s GDP Growth Missed Consensus. Strong Activity Data Support Renminbi’s Outlook

The latest set of China's macroeconomic data is mixed in the headline. GDP growth in the third quarter came in below market expectation. However, major indicators such as industrial production, retail sales and fixed asset investment all beat consensus, confirming recovery is underway. Against this backdrop, we expect PBOC...

US Dollar Retreats Due To ‘Risk-On’ Rally

US dollar dips as Trump returns home The US dollar retreated overnight, as investors piled into pro-cyclical assets and out of defensive assets as the US president returned to the White House, supported by US ISM data and fiscal stimulus hopes. The US dollar index fell 0.38% to 93.40, with...

Week Ahead: October Will be Anything but Normal

This week is going to be full of headlines regarding President Trump’s health and Brexit. As if things couldn’t get more bizarre in 2020, US President Trump and his wife have tested positive for the coronavirus, only weeks ahead of the November 3rd US election.  Traders will be monitoring the...

USD/CNH: Remain Under Pressure Despite A Modest Rebound

On Friday, the ICE U.S. Dollar Index climbed to a 2-month high of 94.64, amid continued short covering. USD/CNH rebounded 0.6% last week, halting an 8-week decline. This week, investors will focus on the release of China's September official Manufacturing PMI (a slight improvement to 51.3 expected), Non-manufacturing PMI (edging...

Dollar Softens in Quiet Markets, RBNZ and SNB to Meet This Week

The markets are rather quiet in Asian session with Japan on holiday. Some selloff is seen in Hong Kong stocks but others simply ignored. The forex markets are generally stuck inside Friday's range, with Dollar and Swiss Franc trading with a soft tone. On the other hand, Aussie and...

PBoC kept LPR unchanged for the fifth straight month

China's PBoC kept its benchmark lending rates unchanged for the fifth consecutive month today. The one-year Loan Prime Rate was held at 3.85%. Five-year LPR was kept at 4.65%. That was basically in line with market expectations. Recent economic data from China suggested that the economy is on track for...

USD/CNH 4H Chart: Short-Term Decline Expected

Since the end of July, the USD/CNH currency pair has been depreciating, guided by a descending trend line. From a theoretical point of view, it is likely that some downside potential could continue to prevail in the market in the medium term. In this case the exchange rate could gain...

Aussie Rallies as Chinese Data Gives Sentiment Additional Boost

Investors seemed to have put last week's selloff in stocks behind already. Asian markets, except Japan, trade generally higher following the rebound in the US overnight. Additional, upside surprises in data from China boost optimism that it's back on track for stronger rebound for the rest of the year....

China data beat expectations, USD/CNH breaks key fibonacci support

August economic data released from China today were generally better than expected. Industrial production continued its bounce and rose 5.6% yoy versus expectation of 5.1% yoy. That's also the fastest rise in eight months. Retail sales rose 0.5% yoy versus expectation of 0.0% yoy. Sales were finally growth after...

Euro Mildly Higher in Mixed Markets, Kiwi Down as Election Postponed

Euro strengthens mildly in generally mixed Asian markets today. There is no clear direction as Japan stocks diverge from others while gold and oil are rangebound. Canadian and Australian Dollar are following as the next strongest but movements are limited. Yen and Dollar are trading with an undertone. But...

PBoC kept MLF rate at 2.95% for 4th month, USD/CNH softer in range

China's central bank PBoC rolled over CNY 700B maturing medium-term loans today. Rate was kept at 2.95%, unchanged for the fourth straight month. The injection was well above the two set batches of MLF that are set to expire in August, totalling CNY 500B. Markets are expecting no change...

Sentiments Weighed Mildly by China Data, Gold and Yields to Watch

Markets are relatively steady in Asia today. Sentiment was somewhat weighed down by mixed data from China, but there is no apparently follow through selling. New Zealand Dollar continues to be pressured as the country extends coronavirus lockdown by 12 days. Australian Dollar seems to be benefiting from the...

China retail sales unexpectedly contracted in July, USD/CNH channeling lower

The batch of economic data released from China is mixed. In particular, retail sales contracted -1.1% yoy in July, versus expectation of 0.3% yoy. That showed vulnerability in domestic demand. Nevertheless, industrial production rose 4.8% yoy in July, slightly above expectation of 4.7% yoy. Fixed asset investment dropped -1.6%...

China PMI manufacturing edged higher to 51.1, USD/CNH staying in near term decline

China's official PMI Manufacturing rose to 51.1 in July, up from 50.9, slightly above expectation of 51.0. That's the highest reading since March too. Looking at some details, production rose 0.1 to 54.0. New orders also improved by 0.3 to 51.7. New export orders rose notably by 5.8 to...

Yen Selloff Accelerates Even Though Risk Sentiments Turned Mixed

Risk markets turned mixed today as investors appear to be turning from optimism to cautiousness. Hong Kong stock suffered steep losses on escalating US-China tension. The selloff somewhat carries forward to European markets. Yet, US markets open with slight gains. In the currency markets, Euro is leading the way...

USD/CNH defending 7 handle as US-China tension escalates

Some volatility is seen in USD/CNH today after the pair dips to as low as 6.9633 on broad based Dollar weakness, but recovers back above 7 handle quickly. Escalating US-China political tension is seen as a major factor driving the moves. China's foreign Ministry spokesman Wang Wenbin revealed that the US...