We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bearish
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • The Australian Dollar and New Zealand Dollar tend to rise with stocks. They have recently fallen despite gains in the #SP500. What does this mean for $AUDUSD and $NZDUSD ahead? #AUD #NZD #RBA #RBNZ - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/17/AUDUSD-NZDUSD-Outlook-Looks-Past-Stocks-to-Rate-Cut-Bets.html?CHID=9&QPID=917702 https://t.co/ddf2fV7Kyl
  • A few snippets from today's commentary. Check out the link below for the full story (via @DailyFX). https://t.co/I31tuq764r https://t.co/x0BaiOFA1P
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/e2YrN3dBrl
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.00%, while traders in France 40 are at opposite extremes with 79.59%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/UL7hqSD2Ki
  • US Dollar Forecast: $USD Lacking Impetus Ahead of Consumer Sentiment #Forex traders shift focus away from US-China trade deal headlines - perhaps toward the monthly release of #ConsumerSentiment data for volatility and clues on the Greenback's next move https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2020/01/16/us-dollar-forecast-usd-lacking-impetus-ahead-of-consumer-sentiment.html
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.11% 🇦🇺AUD: -0.02% 🇯🇵JPY: -0.03% 🇨🇭CHF: -0.05% 🇬🇧GBP: -0.06% 🇨🇦CAD: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Kxcb9EtIWb
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.45% France 40: 0.26% Wall Street: 0.07% US 500: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/I5YIsKQAog
  • 🇯🇵 JPY Tertiary Industry Index (MoM) (NOV), Actual: 1.3% Expected: 1.0% Previous: -5.2% https://www.dailyfx.com/economic-calendar#2020-01-17
  • The $JPY has weakened as a bounce-back in risk appetite saps haven-asset demand. However, the old uptrend line still provides clear resistance. Get your market update from @DavidCottleFX HERE:https://t.co/IMhgQ9jbF9 https://t.co/I7087olftk
  • Heads Up:🇯🇵 JPY Tertiary Industry Index (MoM) (NOV) due at 04:30 GMT (15min), Actual: N/A Expected: 1.0% Previous: -4.6% https://www.dailyfx.com/economic-calendar#2020-01-17
Kiwi Falls, U.S. Dollar Rallies as Market Shrugs Off Fed's Stress Tests

Kiwi Falls, U.S. Dollar Rallies as Market Shrugs Off Fed's Stress Tests

2012-03-14 13:46:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

Fundamental Headlines

- Citigroup, SunTrust Banks Capital Plans Fail Fed Stress Tests – Bloomberg

- Merkel Says Europe is ‘Good Way’ Up Mountain, Not over It – Bloomberg

- China’s Wen Bets Final Year on Reform Push – Reuters

- Fed’s Outlook a Tad Sunnier – WSJ

- Wins in South for Santorum – WSJ

European Session Summary

With volatility on U.S. equity markets at an extremely low level, the stage has been set for a major rally is higher yielding currencies and risk-correlated assets. Similarly, even though the Federal Reserve has softened its dovish tone, other major central banks, mainly the Bank of England, the Bank of Japan, and the European Central Bank, have all embarked on massive easing programs. My point: low volatility and excess liquidity should be creating an explosive risk-on environment.

While this may be transpiring in equity markets, currency markets are not taking the cross-market cue as credit begins to correct. As the Dow Jones Industrial Average trades at its highest level in nearly five-years and the S&P 500 nears the psychologically significant 1400 level, the U.S. Dollar has been a surprising stalwart in the currency markets. Similarly, U.S. Treasuries remain near historic lows (the 10-year yield had held above 2.00 percent yield for five consecutive days for the first time since the first week of December), a strong suggestion that the global economy is not out of the woods just yet.

Diving into European credit specifically, the German 10-year Bund yield jumped back to 1.932 percent yield, another sign that risk-appetite should have been bolstered today. Likewise, other core credit – Dutch and Finnish, mainly – also pared back their recent gains. Also weak on the day was Portuguese and Spanish debt, with 10-year yields climbing by 2.1-basis points and 3.2-basis points, to 13.121 percent and 5.131 percent yields, respectively. The divergence between Italian and Spanish debt continues, with the Italian 10-year bond yield falling to 4.829 percent. All these signs suggest a rally by the commodity and European currencies, yet this has failed to play out.

NZDUSD 5-min Chart: March 14, 2012

Kiwi_Falls_U.S._Dollar_Rallies_as_Market_Shrugs_Off_Feds_Stress_Tests_body_Picture_13.png, Kiwi Falls, U.S. Dollar Rallies as Market Shrugs Off Fed's Stress Tests

Charts Created using Marketscope – Prepared by Christopher Vecchio

Overall, the New Zealand Dollar was the worst performer, falling 1.39 percent against the U.S. Dollar. At the time this report was written, the British Pound was the top performer against the Greenback, with the GBPUSD depreciating by a slight 0.03 percent. Meanwhile, the Japanese Yen continued to make headway against the commodity currencies, as was expected per this week’s fundamental forecast. With that said, the Yen is still the worst performer this year, with the USDJPY up by 7.98 percent year-to-date while the NZDJPY has appreciated an astounding 11.88 percent.

24-Hour Price Action

Kiwi_Falls_U.S._Dollar_Rallies_as_Market_Shrugs_Off_Feds_Stress_Tests_body_Picture_10.png, Kiwi Falls, U.S. Dollar Rallies as Market Shrugs Off Fed's Stress TestsKiwi_Falls_U.S._Dollar_Rallies_as_Market_Shrugs_Off_Feds_Stress_Tests_body_Picture_1.png, Kiwi Falls, U.S. Dollar Rallies as Market Shrugs Off Fed's Stress Tests

Key Levels: 14:05 GMT

Kiwi_Falls_U.S._Dollar_Rallies_as_Market_Shrugs_Off_Feds_Stress_Tests_body_Picture_7.png, Kiwi Falls, U.S. Dollar Rallies as Market Shrugs Off Fed's Stress Tests

Thus far, on Wednesday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is trading higher, at 10052.07 at the time this report was written, after opening at 10014.71. The index has traded mostly higher, with the high at 10060.07 and the low at 10004.38.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to cvecchio@dailyfx.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.