Slower Chinese language Progress and Geopolitical Tensions Add to Fragile ToneA tender begin to the week offers a tailwind for safe-haven currenci
Slower Chinese language Progress and Geopolitical Tensions Add to Fragile Tone
A tender begin to the week offers a tailwind for safe-haven currencies, most notably the Japanese Yen. In a single day, Asian indices had been broadly within the purple as Chinese language exercise information missed expectations, reinforcing the view that progress is slowing within the area. What’s extra, rising geopolitical tensions in Afghanistan after Taliban leaders took over the presidential palace add to the delicate sentiment. Whereas at this stage, it’s tough to evaluate how a lot market focus is being positioned on the state of affairs in Afghanistan, ought to tensions escalate, naturally, this is able to be anticipated to underpin JPY and USD.
USD Drop to be Light
On the backend of final week, U. of Michigan sentiment surprisingly dropped to a decade low, surpassing the lows seen on the top of the preliminary Covid disaster. In flip, the USD got here underneath notable promoting strain, alongside US yields, with the 10 yr falling 6-7bps. Nonetheless, given the present market uncertainty and with the FOMC minutes attributable to be launched, which in my opinion will lean on the marginally hawkish facet on condition that we’re nearing the time for a taper sign, the buck is prone to fade the U. of Michigan sentiment impressed weak point, making a return to the 93.00 deal with.
US Greenback Chart: 10 Minute Time Body
Supply: Refinitiv
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