News & Analysis at your fingertips.

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
Subscribe
Please try again
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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Gold and silver prices have come under significant pressure recently. However, this correction lower could prove short-lived as price analysis hints at a reversal higher. Get your $XAUUSD market update from @DanielGMoss here:https://t.co/K1qL0fsGwy https://t.co/lvDggOLCCR
  • Australian Dollar to Rise as Easing Border Restrictions Buoy Sentiment - https://www.dailyfx.com/forex/market_alert/2020/11/26/Australian-Dollar-to-Rise-as-Easing-Border-Restrictions-Buoy-Sentiment.html $AUD $AUDJPY $AUDUSD https://t.co/izMcqggHOC
  • 🇰🇷 Interest Rate Decision Actual: 0.5% Expected: 0.5% Previous: 0.5% https://www.dailyfx.com/economic-calendar#2020-11-26
  • Bank of Korea: 2020 GDP growth seen at -1.1% versus -1.3% projected in August, 2021 GDP growth seen at 3.0% versus 2.8% anticipated prior -BBG
  • Heads Up:🇰🇷 Interest Rate Decision due at 01:00 GMT (15min) Actual: 0.5% Expected: 0.5% Previous: 0.5% https://www.dailyfx.com/economic-calendar#2020-11-26
  • 7 out of 11 Dow Jones sectors ended lower, with about 63.3% of the index’s constituents closing in the red. Energy (-3.64%) , materials (-2.25%) and communication services (-1.24%) were among the worst performers on Wednesday. https://t.co/5MfrUSOYw4
  • Australian Private Capital Expenditure -3.0% in Q3 vs -1.5% expected and from -6.4% in Q2 (revised worse from -5.9%), $AUDUSD little changed so far -BBG
  • RT @FxWestwater: New Zealand Dollar Forecast: $NZDUSD May Rise Over Thanksgiving Holiday Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/11/26/New-Zealand-Dollar-Forecast-NZDUSD-May-Rise-Over-Thanksgiving-Holiday.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/dJMDOV…
  • The S&P 500, Dow Jones and crude oil prices have recently made critical advances to the upside. Is retail positioning supporting the case for further upside momentum?https://t.co/rfA2TsBctB https://t.co/D6bYpLxrKk
  • Update on #Cryptocurrencies #BITCOIN -0.85% #BITCOINCASH -4.66% #ETHEREUM -2.27% #RIPPLE -1.24% #LITECOIN -2.87%
Forex: Yen Gains, Aussie Falls as Risk Trends Oscillate Before FOMC

Forex: Yen Gains, Aussie Falls as Risk Trends Oscillate Before FOMC

2013-10-29 06:58:00
Ilya Spivak, Head Strategist, APAC
Share:

Talking Points

  • Yen Rallies, Aussie and Kiwi Sink as Risk Aversion Engulfs Asian Markets
  • Seesawing Sentiment Trends Reflect Uncertainty Ahead of FOMC Meeting
  • Dollar May Turn Lower Anew as Soft US Data Informs QE ”Taper” Bets

Get Real-Time Feedback on Your Trades with DailyFX on Demand!

Risk appetite unraveled overnight, weighing on the sentiment-linked Australian and New Zealand Dollars while driving the Japanese Yen higher on the back of safe-haven demand. The MSCI Asia Pacific regional benchmark stock index fell 0.5 percent. The newswires chalked up the move disappointment about China’s ability to reign in borrowing costs, a recently prominent sore spot. The PBOC injected CNY13 billion into the market after a two-week pause in liquidity provision but the benchmark 7-day SHIBOR rate still advanced to a new there-month high of 4.497 percent.

We see the move in a larger context, reflecting seesawing sentiment trends ahead of Wednesday’s much-anticipated FOMC policy announcement. A “risk-on” mood was prevalent yesterday but investors are reasonably unwilling to commit to a sustained directional bias before getting an update on the Fed’s timeline to begin scaling back its QE3 stimulus program. With that in mind, today’s “risk-off” lean appears to be a function of profit-taking, returning market-wide sentiment to a broadly neutral setting.

The consensus view on the timing of the first cutback in asset purchasesbegan to shift in response to October’s US government shutdown, with the baseline scenario now pointing to March 2014 as the start of the normalization process. The incorporation of this view into asset prices over recent weeks has pushed the S&P 500 to a new record high and sent the US Dollar sharply lower. The commencement of this process increasingly suggests any outsized volatility is likely to come from an indication that QE “tapering” will begin sooner rather later.

Recalling the ultimately unfounded fears of the fiscal drag from an increase in payroll tax withholding and the “sequester” spending cuts on the US recovery earlier this year, the possibility that worries about the shutdown’s impact are overstated seems quite real. Furthermore, given the Fed’s recently spotty record of managing investors’ expectations, officials will probably want to see more hard evidence on the shutdown’s impact before tinkering with existing guidance. That means the absence of a discernible dovish shift in the FOMC policy statement’s rhetoric may significantly weigh on risky assets and boost the greenback.

In the meantime, a quiet European economic calendar is likely to see markets looking ahead to US Retail Sales and Consumer Confidence data. Draw-downs are expected on both fronts, which may help boost risk appetite in the near term. S&P 500 futures are trading flat in late Asian hours, hinting the door is open for a pro-risk shift in prevailing trends.

New to FX? START HERE!

Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

23:30

JPY

Household Spending (YoY) (SEP)

3.7%

0.5%

-1.6%

23:30

JPY

Jobless Rate (SEP)

4.0%

4.0%

4.1%

23:30

JPY

Job-To-Applicant Ratio (SEP)

0.95

0.96

0.95

23:50

JPY

Retail Trade (YoY) (SEP)

3.1%

1.8%

1.1%

23:50

JPY

Retail Trade s.a. (MoM) (SEP)

1.8%

0.5%

0.9%

23:50

JPY

Large Retailers' Sales (SEP)

0.7%

0.7%

-0.1%

4:37

CNY

Leading Index (SEP)

99.64

-

99.89

5:00

JPY

Small Business Confidence (OCT)

50.8

-

49.8

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

9:30

GBP

Net Consumer Credit (SEP)

0.7B

0.6B

Low

9:30

GBP

Net Lending Sec. on Dwellings (SEP)

1.2B

1.0B

Low

9:30

GBP

Mortgage Approvals (SEP)

66.0K

62.2K

Medium

9:30

GBP

M4 Money Supply (MoM) (SEP)

0.5%

0.7%

Low

9:30

GBP

M4 Money Supply (YoY) (SEP)

2.5%

2.1%

Low

9:30

GBP

M4 Ex IOFCs (3M Annualized) (SEP)

4.5%

4.3%

Low

Critical Levels:

CCY

SUPP 3

SUPP 2

SUPP 1

Pivot Point

RES 1

RES 2

RES 3

EURUSD

1.3707

1.3750

1.3767

1.3793

1.3810

1.3836

1.3879

GBPUSD

1.5992

1.6075

1.6109

1.6158

1.6192

1.6241

1.6324

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To receive Ilya's analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

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

DISCLOSURES