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
Mixed
USD/JPY
Mixed
Gold
Bullish
Oil - US Crude
Bullish
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
Bitcoin
Mixed
More View more
Real Time News
  • The $JPY is overwhelmingly in the grip of fundamental and macro action, but $USDJPY charts show the pair in a fascinating spot. Get your market update from @DavidCottleFX here:https://t.co/nD8RuyzvGG https://t.co/aIKgiiuv0v
  • European Opening Calls from IG: #FTSE 7211 -0.02% #DAX 12692 -0.49% #CAC 5623 -0.61% #MIB 22398 -0.40% #IBEX 9331 -0.53% #STOXX 3585 -0.54% #SA40 49454 -0.31%
  • JPY Japan Sep Nationwide Department Store Sales YY: Actual: 23.1% Previous: 2.3% Tokyo Department Store Sales: Actual: 20.7% Previous: 4.7% Retail demand has clearly picked up ahead of planned sales tax hike
  • Trump Policies Invite Inflation But Gold Prices May Fall Anyway - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/10/23/Trump-Policies-Invite-Inflation-But-Gold-Prices-May-Fall-Anyway.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #gold #XAUUSD #Trump
  • As China’s growth slows, the currency of the other Asian titan ought to be burnished as investors look for opportunities elsewhere. However, that’ s not happening. Get your market update from @DavidCottleFX here: https://t.co/ETBCpBDSS7 https://t.co/XA4p4pJMjz
  • Market Snapshot: Asia Pacific equities trade cautiously lower, extending losses from Tuesday's Wall Street session amid #Brexit woes. Pro-risk Australian and New Zealand Dollars lower as the anti-risk Japanese Yen and haven-linked US Dollar climb #USD #Yen
  • $USDMYR rose as #Malaysian CPI clocked in at 1.1% y/y versus 1.3% expected. Most of the Ringgit's weakness was already delivered as risk trends soured in APAC trade. #USD rose as #Nikkei225 futures fell, reacting to the latest #Brexit drama (as expected) - https://t.co/vtMaQur9Rr https://t.co/uZumSqSFWO
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.94%, while traders in Germany 30 are at opposite extremes with 77.96%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/c9YDTgwiOp
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.18% 🇨🇭CHF: -0.03% 🇪🇺EUR: -0.05% 🇬🇧GBP: -0.17% 🇳🇿NZD: -0.20% 🇦🇺AUD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/iw4jyVH1GO
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.18% US 500: -0.28% France 40: -0.75% Germany 30: -0.78% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/bRx6YViuFL
Can "Trump Trading" Explain All Asia FX Weakness?

Can "Trump Trading" Explain All Asia FX Weakness?

2016-11-22 09:21:00
David Cottle, Analyst
Share:

Talking Points

  • Asian currencies have been hit by the stronger US Dollar, as have others
  • But is the Trump trade solely to blame here?
  • Political uncertainties are not the province of the West

Many Asian currencies have been battered by the rising US Dollar in the wake of Donald Trump’s unexpected win in the US presidential election.

The Yen has endured two weeks of falls, for example. USD/JPY’s Monday peak of 111.36 was its loftiest point since the end of May.

Malaysia’s Ringgit has had things even worse. The US Dollar has risen 6% against it in November so far.

The rationale behind the “Trump trade” is that the new US President will pursue reflationary fiscal policies. These will increase the attraction of USD-denominated assets. A stronger greenback will also make life tougher for those countries with plentiful US Dollar debt.

This has hit most traded currencies of course, not just those in Asia. The trade-weighted US Dollar index, which tracks the greenback’s performance against a basket of widely traded units, hit a 13.5 year high on Friday.

But the foreign-exchange world is largely trying to assess a new Western political landscape. This of course involves not just parsing Trump but following the rise of populism in a Europe still reeling from June’s Brexit vote.

However, while Western political tectonics are undoubtedly shifting, there is also an unusually broad range of political unrest across Asia at the moment. Here's a rundown:

In South Korea, President Park Geun-hye has been under pressure for a month for allowing a close friend of hers, one Choi Soon-Sil to become involved in political affairs.

There have been widespread public protests against Park, and the tension ratcheted up a little on Monday when opposition parties in Seoul called for a review of the country’s impeachment procedures. They also said that they would begin taking signatures from those who support Park’s removal from office.

Meanwhile Malaysia’s capital saw protests on Saturday demanding the resignation of Prime Minister Najib Razaj. His administration has been buffeted by allegations of graft involving the indebted 1 Malaysia Development Berhad state fund, which he founded.

Across the South China Sea,Indonesia has also seen a rally calling for unity amid clearly-deepening religious divisions in Southeast Asia’s largest economy.

There has also been communal violence in Myanmar, notably in the country’s western state of Rakhine. The state hasbeen under a security lockdown since early October.

Hong Kong has seen protests against Beijing after a court there banned two elected lawmakers from taking their seats in the territory last month.

Finally, we come to Thailand. There, King Bhumbibol Aduvalei’s death in October is still being mourned. However the country is only two years past a military coup. The late King’s vast moral authority helped sooths many past internal wounds and investors do not yet have the same confidence in his son.

Obviously these are issues of differing magnitudes and concern to investors. That said, many of the countries involved are either established investment destinations, such as South Korea and Hong Kong, or nations often touted as the next Asian tiger, such as Myanmar.

It’s unusual to see such widespread political issues right across the region at the same time.And while the Trump trade is undoubtedly behind a lot of the US Dollar’s strength, it doesn’t look as though it is the whole story in Asia.

Sign of the times? The US Dollar has surged against Malaysia’s Ringgit since Trump’s win.

Can "Trump Trading" Explain All Asia FX Weakness?

Chart compiled using TradingView.

--- Written by David Cottle, DailyFX Research

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

DISCLOSURES

News & Analysis at your fingertips.