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Starting at the end of last week, emerging market currencies sold off sharply, along with developed market equities. The primary cause of this sell-off was concern that China was in fact slowing down. Since most emerging markets sell raw materials to China, China’s slowdown would have a negative impact on their respective GDPs. Read more
The dollar was broadly higher in N.Y. trade on Thursday. Despite a small miss on GDP, and firmer claims data, risk appetite returned, taking Wall Street sharply higher following its rout earlier in the week. This supported the greenback versus most major currencies. Read more
FX trade was choppy through the morning, as rate hikes in Turkey and South Africa kept EM fears alive and stoked. The greenback started out on stronger ground, though quickly fell back with equities, and save haven related Treasury buying. The dollar edged higher after the FOMC announcement and taper, which was widely expected, though reaction was fairly muted. Read more
The USD is little changed, with EUR-USD trading around 1.3660, after rising to 1.3685 earlier. Yen and Swiss franc meanwhile erased declines as the impact of the Turkish rate hike fades. It seemed the Turkish move revived confidence in emerging markets and reduced safe haven demand, but this was only short lived with the focus turning to the FOMC announcement today. Read more
All eyes will be on the Fed after the European close, though ahead of the announcement, we expect FX trade will be limited to position adjustments, though Turkey's rate hike may keep the greenback supported into the announcement. The FOMC began its policy meeting, the last one under Chairman Bernanke, on Tuesday. Read more
The dollar slipped back following a very weak durables report, though managed to recover in the aftermath of a better than expected consumer confidence print. EUR-USD made its way to 1.3685 highs before easing back under 1.3660, while USD-JPY dipped under 102.65, and later recovered to hit the 103.00 mark. Read more
The USD pushed higher as stocks recover in Europe, with the move partly fuelled by stop orders and partly as the market is being mindful of the FOMC announcement tomorrow that is widely expected to announce a further tapering. The Fed tapering view is strengthened by the backdrop of calmer markets today, reflected by the health 0.8% rebound in the STOXX 600 index and a 0.5% gain in S&P 500 futures. Read more
The dollar stabilized for the most part on Monday in N.Y. dealings, after the rout it suffered late last week, though risk taking levels remained weak in light of EM concerns, and the upcoming FOMC meeting, where another leg of taper is in the cards. EUR-USD gave back the 1.37 handle in London, and the pairing steadied above 1.3650 through the session. Read more
Starting at the end of last week, we’ve seen a large sell-off in emerging markets. It started with Argentina devaluing their currency last Tuesday. The South African rand has also sold off, as has the Turkish Lira – whose sell-off has been so sharp the Turkish central bank is calling an emergency meeting. Read more
No big movements among the main currencies, though emerging nation currencies and stock markets in Europe and Asia remained under pressure. The dollar was net modestly firmer versus the yen, and near net unchanged versus the euro. USD-JPY recovered to the 102.50-70 area in Europe after diving to a new cycle low of 101.76 in thin, pre-Tokyo trade in Asia. Read more
