May 27, 2021
Daily FX Market Roundup 05.27.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
After weeks of tier one economic reports from all corners of the world, the lack of market moving data outside of the Reserve Bank of New Zealand’s rate decision meant the possibility of quiet consolidative trade. However that was the complete opposite of what we saw this week as the central banks of New Zealand and the U.K. dropped hints of tightening.
Sterling soared today on the back of Bank of England member Vlieghe’s comment that rates could rise as soon as the first half of next year if the job market recovers faster than expected. This was followed almost immediately by Prime Minister Johnson’s comment that there is nothing in recent COVID data that will delay their June 21st reopening. Vlieghe’s optimism and the rally in the pound is consistent with the improvements in data and the central bank’s overall forecast for a faster recovery. When
May 25, 2021
Daily FX Market Roundup 05.25.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Tonight’s Reserve Bank of New Zealand monetary policy announcement is one of this week’s most important events. Next to the Bank of Canada who tapered asset purchases last month, the RBNZ is one of two central banks that could reduce stimulus this year. The housing market is on fire, commodity prices are on the rise, consumer spending rose more than expected and the unemployment rate dropped to 4.7% in the March quarter, well below the central bank’s 5% forecast.
Earlier this month, the central bank tightened their loan-to-value ratio to require all new investor loans to be less than 60% of the property value and owner-occupied loans to be restricted to 80% of value. In their Financial Stability Report, the RBNZ warned that the LVR restrictions could be tightened further if prices do not ease.
FX: All About Inflation moneyshow.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from moneyshow.com Daily Mail and Mail on Sunday newspapers.
US Stocks Finish Lower As Nasdaq Rally Peters Out By John BIERS
05/18/21 AT 5:32 PM
Wall Street stocks finished firmly lower Tuesday after a tech sector rally faded in the latter portion of the session, even as Walmart and other retailers reported strong results.
Investors have been awaiting a bounce in the tech-rich Nasdaq following a period of weakness, but a late-session dive pushed it lower, along with the Dow and S&P 500. Unfortunately, dip-buyers were flaky today, thereby keeping a lid on risk sentiment and keeping the S&P 500 within a consolidation trend, said Briefing.com.
The Nasdaq finished down 0.6 percent, with Apple, Amazon and Facebook all losing more than one percent.
May 18, 2021
Daily FX Market Roundup 05.18.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Weaker U.S. data is finally catching up to the dollar. The greenback traded lower against all of the major currencies on Tuesday following softer housing data. Building permits grew 0.3% in the month of April, down from 1.7% in March while housing starts dropped -9.5%. While housing demand is still very strong, the cost of raw materials like lumber have skyrocketed in recent months – in the 12 months to April, lumber prices rose more than 89%. Between weak job growth, the decline in spending, slowdown in manufacturing activity in the NY region and now housing, it was only a matter of time before the dollar sold off across the board as these reports reinforce the Federal Reserve’s reluctance to respond to rising price pressures. At a time when the global recovery is gaining momentum, the dollar should underperform.