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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
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
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • GBP/USD continues to struggle to break through psychological resistance at the 1.25 mark, as it has throughout this month so far.Get your $GBPUSD market update from @MartinSEssex here: https://t.co/6ERhzKaA7s https://t.co/cIeo4DqTLB
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: US 500: -0.51% Wall Street: -0.74% France 40: -0.98% Germany 30: -1.32% FTSE 100: -1.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/73COlz9pMA
  • the term 'parabolic' may be in use quite a bit over the next few days/weeks with what's been going on in $TSLA $AMZN and now $SHCOMP https://t.co/LXXfi0duOk
  • The $USDCNH has aligned to the Chinese Index's rally. Here is the exchange rate overlaid with the SPX-SHCOMP ratio and a 10-day (2 week) correlation coefficient between the two is below: https://t.co/fTPQ6LaZts
  • This has been an interesting move: the Shanghai Composite ($SHCOMP) has posted its largest 5-day rally since Dec 8, 2014 while other risk benchmarks globally have somewhat spun their tires https://t.co/FJdBNuhlOW
  • 🇷🇺 Foreign Exchange Reserves (JUN) Actual: $568.9B Previous: $566.1B https://www.dailyfx.com/economic-calendar#2020-07-07
  • Heads Up:🇺🇸 Fed Bostic Speech due at 13:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-07-07
  • Heads Up:🇷🇺 Foreign Exchange Reserves (JUN) due at 13:00 GMT (15min) Previous: $566.1B https://www.dailyfx.com/economic-calendar#2020-07-07
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/Aj51jJraPw
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.37%, while traders in NZD/USD are at opposite extremes with 72.78%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/l8kBNxbrIK
DXY, EUR/USD Hit Pause While Asian, EM FX Burn

DXY, EUR/USD Hit Pause While Asian, EM FX Burn

2016-11-11 12:40:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- DXY Index back at the October highs as EUR/USD steadies just above $1.0850, the October low.

- Asian currencies, EM FX hit hard as reality sets in that the period of cheap, export-led growth - unbounded globalization - is coming to an end between Brexit and President-elect Trump.

- It's Veteran's Day in the US (Armistice Day everywhere else), so take a moment to remember those who served.

Market activity may quiet down during the European and North American trading hours today as many market participants will be taking holiday for Veteran's Day/Armistice Day. While bond markets have a recommended close by SIFMA, US equity markets will remain open. The economic calendar is fairly light overall, and incoming US economic data reporting before the election may carry less significance going forward, given the dramatic shift in US fiscal policy that's currently being priced into markets.

In spite of the holiday today, however, there has not been a cessation of hostilities among the Asian and emerging market currencies. The reactions we're seeing are very much tied to President-elect Trump. One of his core campaign pledges was to take on a more protectionist view: labeling China as a currency manipulator; slapping a tariff on Chinese goods; withdrawing from the TPP deal; and renegotiating NAFTA.

In sum, these prospective policy shifts point to only one possible conclusion: the Asian and emerging market growth miracle - fuelled by weak FX rates, cheap credit, and overwhelming demand from Western economies - is coming to an end. Of course, there is a potential to kick off a trade war - long-end US yields have been rising rapidly, perhaps a sign of a foreign sovereign dumping Treasuries? - but it's far too soon to travel down that counterfactual path.

Certainly, EM currencies have had it worse than DM currencies. While EUR/USD has reversed sharply this week, it still finds itself hovering over the mid-October swing lows near $1.0850. Concurrently, the DXY Index, constituted by nearly 60% Euro, continues to hold below its October swing highs around 99.10. Somewhat obviously, we'd be hard pressed to believe that DXY can breakout without EUR/USD breaking down, or vice-versa.

See the above video for a technical review of the DXY Index, EUR/USD, GBP/USD, AUD/USD, USD/JPY, USD/CAD, USD/MXN, and Crude Oil.

Read more: Trump Reflation Trade Fueling US Yields, US Dollar Rally

--- Written by Christopher Vecchio, Currency Strategist

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, please fill out this form

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

DISCLOSURES

News & Analysis at your fingertips.