Risk aversion is intensifying on the Forex market, making the Japanese yen one of the best performing currencies. It was a real surprise, considering how weak was the currency last year. The yen was falling in 2013 as policy makers preferred to keep the currency weak and it was expected that the weakness would persist after the Bank of Japan kept excessive stimulus in place this month. Yet the trading environment has completely … “Fear on FX Market Helps Yen to Become Top Performer”
Month: January 2014
Sterling Reacts Poorly to Carney’s Speech
The Great Britain pound sank today as Bank of England Governor Mark Carney said that interest rates would not be raised prematurely and that the strong currency may be detrimental to economic growth. Previously, there were speculations that the BoE will raise borrowing costs sooner as unemployment was falling. Carney agreed that the 7 percent unemployment level, which is a threshold for considering higher interest rates, … “Sterling Reacts Poorly to Carney’s Speech”
Swissie Profits from Aversion to Risk
The risk aversion sentiment, which hurt currencies of emerging markets, plays in favor of safer ones, including the Swiss franc. The Swissie, along with the Japanese yen, is one of the strongest currencies in the current risk-off environment. Investors flee risky assets in search for safer ones and the franc is one of logical destinations for them. Of course, there is a downside in the form of the currency cap imposed by the Swiss National Bank. Yet the Swissie is still … “Swissie Profits from Aversion to Risk”
Won Falls as Risk Aversion Drags Asian Currencies Down
Asian currencies fell today and the South Korean won was the biggest loser among them. Wide-spread risk aversion on the Forex market made investors flee riskier assets and stick to safer ones. There are plenty of reasons for investors to worry about. The Federal Reserve’s quantitative easing tapering, signs of economic slowdown in China, political turmoil in several emerging economies make the environment very unhealthy for risky investments. Unsurprisingly, traders prefer … “Won Falls as Risk Aversion Drags Asian Currencies Down”
US Dollar Heads Higher as Risk Aversion Sets In
US dollar is heading higher today, thanks in large part to the fact that risk aversion is setting in. Stock markets around the world are falling, and there are global economic concerns with the latest news out of China. The latest economic data out of China is weighing on markets around the world today. Chinese data was weaker than expected and risk aversion is setting in as a result. High … “US Dollar Heads Higher as Risk Aversion Sets In”
Risk Appetite Flees and Euro Struggles
Risk appetite has left currency market, and the result is a struggling euro right now. There has been some good news out of the eurozone, with Ireland and Spain exiting their bailouts, but there are still plenty of troubles and the European economic recovery may be far from certain. Borrowing costs in countries hit hardest during the sovereign debt crisis in the eurozone are down. Costs in Italy, Portugal, … “Risk Appetite Flees and Euro Struggles”
NZD Drops vs. USD on Risk Aversion, Trims Drop vs. JPY
The New Zealand dollar fell against the US dollar today as risk aversion caused by poor macroeconomic data from China hurt demand for commodity-linked currencies. The kiwi also sank versus the Japanese yen yesterday, but bounced a little today. The unexpected decline of China’s manufacturing sector hurt high-beta currencies, including New Zealand’s one. China is the biggest trading partner of New Zealand. The crisis in Argentina also harmed the risk … “NZD Drops vs. USD on Risk Aversion, Trims Drop vs. JPY”
JPY Climbs to Weekly High vs. USD, Rises vs. Other Majors
The Japanese yen jumped against the US dollar to the highest level in a week today as poor economic news from the United States resulted in speculations that the Federal Reserve will postpone the next round of stimulus cuts. The yen was also higher against some other major currencies, including the Great Britain pound, while trading flat versus the euro. US data was not particularly bad as existing home sales and leading … “JPY Climbs to Weekly High vs. USD, Rises vs. Other Majors”
Brazilian Real Weakens Despite Outlook for Higher Interest Rates
The Brazilian real fell today even though the nation’s central bank will likely continue raising interest rates to combat growing inflation. This is an unusual stance among central banks, especially in emerging economies, which prefer monetary easing, not tightening. The Central Bank of Brazil has raised its key interest rate last week, as was expected by analysts. The bank also suggested that inflation will remain … “Brazilian Real Weakens Despite Outlook for Higher Interest Rates”
Lira Drops to New Record, Central Bank Intervenes
The Turkish lira continued to fall today to new record lows for ninth straight session, demonstrating the longest string of losses since 2001. The big slump made the central bank to intervene to stem the decline, but for now the currency remains very weak. The lira intensified its fall after the central bank’s policy meeting. This spurred the Central Bank of the Republic of Turkey to make an unscheduled intervention, buying the currency. It was the first intervention … “Lira Drops to New Record, Central Bank Intervenes”