Big moves out of China catalyzed big declines across global financial markets, and all eyes turn to Asian markets as they could set the pace for trading one again in the week ahead.
The US Dollar has extended its gains against higher yielding currencies and risk-correlated assets as expected, but as suffered against lower yielding currencies – and other safe havens – universally. This bodes poorly for the US Dollar going forward.
The first week of the year has brought just the most recent allotment of bad data out of the Euro-zone.
Another big week for the British Pound left the GBP/USD exchange rate at fresh monthly highs, but an even-bigger week ahead warns of major volatility for all US Dollar FX counterparts.
A further deterioration in trader sentiment paired with an improvement in Japan’s Balance of Payments (BoP) may spur increased demand for the Yen and trigger another near-term selloff in USD/JPY as market participants scale back their appetite for risk.
The Australian Dollar is at risk of deeper losses as Chinese market turmoil continues to drive risk aversion but upbeat jobs data may help cap negativity.
The yuan rates have broken a lot of records this week.
Gold prices are sharply higher this week with the precious metal rallying nearly 3.9% to trade at 1102 ahead of the New York close on Friday.
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