May 17, 2021
Daily FX Market Roundup 05.17.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
For the past few weeks investors have been focused on the U.S. recovery and its impact on the U.S. dollar. They were sorely disappointed when non-farm payrolls and retail sales came out well under expectations, but so far the dollar’s losses have been limited. Even stocks which declined on Monday is off last week’s lows. This nonchalant attitude stems from the market’s confidence in the global recovery. While some Asia countries tightened coronavirus restrictions, European nations are easing them. The UK kicked off the week with less restrictions on travel and indoor dining. In the euro area, Spain ended their curfew last Sunday. Today, Italy said they would phase out their curfew over the next week. On Wednesday France will move back its curfew from 7pm to 9pm as restaurants and cafes reopen outdoor seating. This will be pushed out further to 11pm on
May 13, 2021
Daily FX Market Roundup 05.14.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Stocks rebounded sharply on Friday but the muted price action in currencies suggest that FX traders are not convinced the selling is over. The U.S. dollar gave back a small portion of yesterday’s gains against the Japanese Yen, Swiss Franc and New Zealand dollar, but was virtually unchanged versus euro and Aussie. Sterling was the only currency to extend its losses versus the greenback on profit taking after the pair hit 2 month highs on Monday.
It was a rollercoaster ride in the financial markets this week and volatility is not expected to subside tomorrow with the April U.S. retail sales report scheduled for release. Between the abysmal non-farm payrolls report and the sharp rise in prices, investors are eager to see how well the consumer is holding up. Economists are looking for retail sales to rise 1% month to month down from 9.8% in March. We think
May 14, 2021
Daily FX Market Roundup 05.14.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Forex traders were unfazed by weak data on Friday with currencies and equities extending their recoveries. Consumer spending stagnated in the month of April after soaring in March. Excluding the costs of autos, which have risen significantly in recent months, spending experienced an unexpected decline of -0.8% against 0.7% forecast. Industrial production growth also slowed and the University of Michigan’s consumer sentiment index plunged to 82.8 from 88.3. Economists were looking for sentiment to improve on the back of the record breaking moves in stocks.
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May 11, 2021
Daily FX Market Roundup 05.11.2021
By Kathy Lien, Managing Director of FX Strategy for BK Asset Management
Stocks sold off sharply on Tuesday with the Dow Jones Industrial Average dropping more than 1% and the NASDAQ losing 2%. As this was the biggest one day decline since February, it should have coincided with big moves in currencies. There was some action around the NY open but by the end of the day, most of the major currency pairs stabilized and recovered prior losses. USD/JPY for example settled above 108.60 after trading as low as 108.34. EUR/USD settled around 1.2150 after trading down to 1.2123. The slide in stocks should have kept Yen crosses at the day’s lows and prevented any meaningful gains in euro. However none of these were big moves, there’s no panic in the market and no flight to safety in currencies. The rise at Treasury yields confirms the relative calmness in other markets.