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Yen May Extend Gains After Worried Tone at G20 Summit

Yen May Extend Gains After Worried Tone at G20 Summit

Ilya Spivak, Head Strategist, APAC

TALKING POINTS – YEN, G20, TRUMP, US DOLLAR, STOCKS

  • Yen gains amid risk aversion after inconclusive G20 summit
  • US Dollar lower as APAC markets digest Trump jawboning
  • Stock index futures hint risk-off mood likely to carry forward

The anti-risk Japanese Yen outperformed in Asia Pacific trade as most regional markets traded lower following a disappointing G20 summit in Argentina over the weekend. The gathering of finance ministers and central bank governors highlighted a familiar list of grievances – from swelling trade war tensions to building financial pressure on emerging markets – but offered no clear path toward their resolution.

Background - A Brief History of Trade Wars, 1900-Present

The US Dollar continued to edge lower as Asia Pacific markets took their turn to onboard two days of jawboning from President Trump. He talked down Fed interest rate hikes and said a stronger currency puts the US at a disadvantage. When those remarks sparked outrage the President doubled down, accusing China and the EU of manipulating FX rates and stoking concerns about competitive devaluation.

Looking ahead, a bland offering of economic data may keep sentiment trends at the forefront. Futures tracking key European bourses are pointing decidedly lower, hinting the risk-off mood is likely to persist. Continued Yen strength seems like the most obvious implication of such an outcome. Follow-though may prove lacking however as traders look ahead to potent event risk later in the week.

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ASIA PACIFIC TRADING SESSION

Asia Pacific Trading Session Economic Calendar

EUROPEAN TRADING SESSION

Yen May Extend Gains After Worried Tone at G20 Summit

** All times listed in GMT. See the full economic calendar here.

FX TRADING RESOURCES

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

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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

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