Archive for: Echo_4

By Ambar Warrick 

Investing.com– Most Asian currencies recovered sharply from recent losses on Tuesday despite hawkish signals from the Federal Reserve, with focus remaining squarely on COVID-related protests in China and the government’s response. 

The rose 0.4% to 7.1792 against the dollar, recovering from a nearly three-week low hit in the prior session, while the jumped 0.8%. 

Civilian protests against the government’s strict zero-COVID policies appeared to have simmered down after escalating over the weekend. Concerns over more economic disruptions from the protests caused deep declines in markets on Monday, although markets stabilized from their losses later in the session. 

Some analysts opined that the protests could also push the government into eventually scaling back its zero-COVID policy- a scenario that is largely positive for Chinese and broader Asian markets. But given that the country is grappling with a record-high daily increase in infections, chances of a zero-COVID reversal in the near-term appear slim. 

Beijing also rolled out more stimulus measures targeting the real estate sector, which supported sentiment towards the country and boosted local stocks. 

Broader Asian currencies tracked a recovery in Chinese markets, brushing off hawkish comments from two Federal Reserve officials that suggested that U.S. interest rates will stay high until well into 2022. The added 0.4%, while the led gains across Asia with a 1.2% jump.

The and fell 0.4% on Tuesday, but hovered above the 106 level, retaining some gains made in the prior session as concerns over China drove up safe haven demand.

But an increasing number of market participants are now betting against the dollar on the notion that U.S. inflation has peaked, warranting by the Fed. 

Fed members have signaled that future rate action will largely depend on inflation, which is currently trending well above the Fed’s 2% annual target. Focus this week is on an address by on Wednesday, as well as on Friday. 

The rose 0.2%, even as data for October missed market expectations, heralding more pressure on the world’s third-largest economy. Expectations of a dovish Fed have benefited the currency in recent weeks. 

Among Antipodean currencies, the jumped 0.8%, while the added 0.7%. 

By Karen Brettell

NEW YORK (Reuters) – The safe-haven Swiss franc and Japanese yen gained on Monday, while the dollar and Chinese yuan underperformed as protests against COVID restrictions in China knocked market sentiment.

The U.S. dollar dipped, meanwhile, which analysts said was unusual as it ran counter to its typical role as a safe haven.

Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China’s stringent COVID restrictions flared for a third day and spread to several cities in the wake of a deadly fire in the country’s far west.

“We’re really looking at the government response to what’s happening… the government response is so unpredictable, and of course that just means de-risking,” said Chris Weston, head of research at Pepperstone.

The greenback dipped 0.46% to 138.51 Japanese yen, and fell 0.41% against the Swiss franc to 0.9440. The Euro gained 0.29% to $1.0433.

Shaun Osborne, chief FX strategist at Scotiabank in Toronto, said that the move in the dollar could reflect a shift in market sentiment towards the U.S. currency, but noted that its too soon to be certain.

“It does suggest perhaps that the swing against the dollar in the sense of the broader market mood or market positioning is perhaps running a little bit deeper this morning and that might well be significant,” Osborne said.

The has fallen to 105.85 from a 20-year high of 114.78 on Sept. 28 on expectations that its rally may have been overstretched and as the Federal Reserve looks to slow its pace of rate increases.

The risk sensitive Aussie dollar was the worst performing major currency, falling 0.93% to $0.6692. The currency was also dented by data showing that Australian retail sales suffered their first fall of 2022 in October as rising prices and higher interest rates finally seemed to have an impact on spending.

The offshore yuan weakened against the dollar to 7.2273.

Fed policy will remain a key focus for the market this week with Fed Chair Jerome Powell due to speak on Wednesday, and with key jobs data for November due on Friday.

The U.S. central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14.

========================================================

Currency bid prices at 9:48AM (1448 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 105.8500 106.3400 -0.44% 10.649% +106.5200 +105.3100

Euro/Dollar $1.0433 $1.0403 +0.29% -8.23% +$1.0497 +$1.0342

Dollar/Yen 138.5100 139.1650 -0.46% +20.33% +139.4350 +137.5000

Euro/Yen 144.50 144.75 -0.17% +10.88% +145.0000 +143.0600

Dollar/Swiss 0.9440 0.9480 -0.41% +3.50% +0.9479 +0.9407

Sterling/Dollar $1.2053 $1.2089 -0.28% -10.86% +$1.2118 +$1.2027

Dollar/Canadian 1.3454 1.3400 +0.41% +6.41% +1.3473 +1.3395

Aussie/Dollar $0.6692 $0.6756 -0.93% -7.92% +$0.6728 +$0.6667

Euro/Swiss 0.9849 0.9833 +0.16% -5.03% +0.9890 +0.9793

Euro/Sterling 0.8654 0.8598 +0.65% +3.02% +0.8675 +0.8587

NZ $0.6208 $0.6247 -0.59% -9.27% +$0.6244 +$0.6193

Dollar/Dollar

Dollar/Norway 9.9245 9.8765 +0.60% +12.79% +9.9800 +9.8835

Euro/Norway 10.3517 10.2549 +0.94% +3.38% +10.3856 +10.2623

Dollar/Sweden 10.4313 10.4112 +0.61% +15.67% +10.5028 +10.3700

Euro/Sweden 10.8834 10.8171 +0.61% +6.35% +10.8988 +10.8406

By Rae Wee and Harry Robertson

SINGAPORE/LONDON (Reuters) – The dollar weakened on Monday as investors weighed up the recent drop in U.S. government bond yields, while anti-government protests in China sent the yuan to a two-week low.

Protests have flared across China and spread to several cities in the wake of an apartment fire that killed 10 people in the city of Urumqi in the country’s far west. Hundreds of demonstrators and police clashed in Shanghai on Sunday night.

China’s onshore yuan finished the domestic session around 0.5% lower at 7.199 per dollar, the lowest close since Nov. 10. The offshore yuan fell to a more than two-week low in Asian trading and was last down 0.1% at 7.201.

“We’re really looking at the government response to what’s happening … the government response is so unpredictable, and of course that just means derisking,” said Chris Weston, head of research at Pepperstone.

The Australian dollar, often used as a proxy for the yuan, slid 0.7% to $0.671.

Elsewhere in currency markets, the dollar was last down 0.99% to 137.77 yen. Earlier in the session it hit 137.57, its lowest level since Aug. 26.

Stephen Gallo, European head of FX strategy at BMO Capital Markets, said a fall in U.S. bond yields was making the dollar less attractive.

“Risk-off conditions in global markets related to China’s COVID situation appear to be showing up in lower long-term sovereign debt yields,” he said. 

“Net-long dollar/yen remains one of the larger positions amongst FX leveraged funds, and these declines in appetite and longer-term yields may have spooked some investors.”

Meanwhile, the euro rose 0.41% to $1.0445, while sterling was up 0.17% at $1.21.

China’s stringent COVID restrictions have taken a heavy toll on its economy, and authorities have implemented various measures to revive growth.

“Companies (in China) are currently facing weaker retail sales from a higher number of COVID cases and falling home prices from unfinished home projects,” said Iris Pang, chief economist for Greater China at ING.

On Friday, the People’s Bank of China (PBOC), the nation’s central bank, said it would cut the reserve requirement ratio (RRR) for banks by 25 basis points (bps), effective from Dec. 5.

The latest developments in China appeared unable to stem the U.S. dollar’s decline, which has been softening over the past few weeks on hopes that the Federal Reserve would soon slow its pace of rate hikes – a view that was supported by minutes of the Fed’s November meeting released last week.

The opened higher on Monday after closing on Friday at 106.05, but was last down 0.66% at 105.65.

Fed Chair Jerome Powell is due to speak on the outlook for the U.S. economy and the labour market at a Brookings Institution event on Wednesday, which could provide more clues on the outlook for U.S. monetary policy.

By Rae Wee

SINGAPORE (Reuters) – The dollar climbed on Monday as protests in China against the government’s anti-COVID policies made investors turn away from riskier assets, and consigned the Chinese yuan to a more than two-week low against the safe-haven greenback.

The protests have flared across China and spread to several cities in the wake of an apartment fire that killed 10 people in Urumqi in the country’s far west. Hundreds of demonstrators and police clashed in Shanghai on Sunday night.

Investors were worried over how the government in Beijing would react to the the wave of civil disobedience when COVID cases are rising.

“We’re really looking at the government response to what’s happening … the government response is so unpredictable, and of course that just means derisking,” said Chris Weston, head of research at Pepperstone.

The offshore yuan fell to an over two-week low in Asian trading, and was last roughly 0.4% lower at 7.2242 per dollar.

The Australian dollar, often used as a liquid proxy for the yuan, slid more than 1% to $0.6681. The fell 0.72% to $0.6202.

China’s stringent COVID restrictions have taken a heavy toll on its economy, and authorities have implemented various measures to revive growth. On Friday, the People’s Bank of China (PBOC), the nation’s central bank, said it would cut the reserve requirement ratio (RRR) for banks by 25 basis points (bps), effective from Dec. 5.

“If the RRR cut is the only monetary policy tool that the PBOC is going to implement, it may not lead to a significant increase in bank lending,” said Iris Pang, chief economist for Greater China at ING.

“Companies are currently facing weaker retail sales from a higher number of COVID cases and falling home prices from unfinished home projects.”

Elsewhere in the currency market, the euro fell 0.5% to $1.0350, while sterling was down 0.26% at $1.2057.

The latest developments in China have put a pause on the U.S. dollar’s decline, which had been softening over the past few weeks on hopes that the Federal Reserve would soon slow its pace of rate hikes – a view that was supported by the November meeting minutes released last week.

Against a basket of currencies, the rose 0.07% to 106.41, edging away from its recent three-month low of 105.30.

Fed Chair Jerome Powell is due to speak on the outlook for the U.S. economy and the labour market at a Brookings Institution event on Wednesday, which couldy provide more clues on the outlook for U.S. monetary policy.

Market expectations of a less hawkish Fed have helped the Japanese yen gain a footing, said Moh Siong Sim, a currency strategist at Bank of Singapore.

The yen was up about 0.5% to 138.40 per dollar.

“The market is thinking that the Fed downshifts to a 50-basis-point rate hike and perhaps going to a pause next year, and that might limit the upside in U.S. (Treasury) yields. And dollar/yen is probably queuing into that sort of idea.”

By Rae Wee

SINGAPORE (Reuters) – The dollar climbed on Monday as protests against COVID restrictions in China rattled financial markets, sending the yuan sliding and pushing nervous investors toward the safe-haven greenback.

The COVID protests have flared across China and spread to several cities in the wake of a deadly fire in Urumqi in the country’s far west, with hundreds of demonstrators and police clashing in Shanghai on Sunday night.

Worries over the unprecedented wave of civil disobedience in a country where in-person protests are rare, the rising COVID cases, as well as how Beijing will react to the situation kept investors on edge.

The offshore yuan fell to an over two-week low in Asian trading, and was last roughly 0.6% lower at 7.24 per dollar.

The Australian dollar, often used as a liquid proxy for the yuan, slid more than 1% to $0.6687. The slumped 0.65% to $0.62065.

“The pushback from residents that we’ve been seeing, obviously the rising tensions and protests … that was something we probably haven’t been expecting to that degree,” said Chris Weston, head of research at Pepperstone.

“We’re really looking at the government response to what’s happening … the government response is so unpredictable, and of course that just means derisking.”

The stringent COVID restrictions have taken a heavy toll on China’s economy, and authorities have implemented various measures to revive growth. On Friday, the People’s Bank of China (PBOC), the nation’s central bank, said it would cut the reserve requirement ratio (RRR) for banks by 25 basis points (bps), effective from Dec. 5.

“If the RRR cut is the only monetary policy tool that the PBOC is going to implement, it may not lead to a significant increase in bank lending,” said Iris Pang, chief economist for Greater China at ING.

“Companies are currently facing weaker retail sales from a higher number of COVID cases and falling home prices from unfinished home projects.”

Elsewhere, the euro fell 0.43% to $1.03575, while sterling was down 0.51% at $1.2027.

The latest developments in China have put a pause on the U.S. dollar’s decline, which had been softening over the past few weeks on hopes that the Federal Reserve would soon slow its pace of rate hikes – a view that was supported by the November meeting minutes released last week.

Against a basket of currencies, the firmed to 106.34, edging away from its recent three-month low of 105.30.

Fed Chair Jerome Powell is due to speak on the outlook for the U.S. economy and the labour market at a Brookings Institution event on Wednesday, which will likely provide more clues on the U.S. monetary policy outlook.

Market expectations of a less hawkish Fed have helped the Japanese yen gain a footing, said Moh Siong Sim, a currency strategist at Bank of Singapore.

The yen was up about 0.5% to 138.46 per dollar.

“The market is thinking that the Fed downshifts to a 50-basis-point rate hike and perhaps going to a pause next year, and that might limit the upside in U.S. (Treasury) yields. And dollar/yen is probably queuing into that sort of idea.”