NY Open: A nervous calm in global FX
FX Trader, Loonieviews.net
FX traders were a tad skittish at the New York open. The US dollar was bid, albeit mildly, commodity prices were soft and global equity indices were in the red. Traders were nervous as there wasn’t any US economic data due today to provide a distraction from President Trump’s geopolitical mess.
USDTRY is still at elevated levels, but for this morning, the negative sentiment has dissipated.
Wall Street is in positive territory, and the US dollar has retreated across the board from its opening levels. EURUSD popped to 1.1430 from 1.1377, in part because of lack of follow through selling overnight and because of no further Trump tweets on Turkey. EURUSD may be overdue for a correction, but gains may be limited due to Turkey and contagion fears combined with the well-entrenched downtrend.
GBPUSD rallied from 1.2749 at the New York open to 1.2784 but needs a decisive break above 1.2790 to extend gains to 1.2830.
USDCAD soared in Asia after President Trump tweeted “Deal with Mexico is coming along nicely. Autoworkers and farmers must be taken care of, or there will be no deal. New President of Mexico has been an absolute gentleman. Canada must wait. Their Tariffs and Trade Barriers are far too high. Will tax cars if we can’t make a deal.”
Trump’s tweet raises concerns that the US may be gravitating toward a bilateral Mexico/US trade pact or else a Mexico agreement will be leveraged to extract concessions from Canada.
On the other hand, Canadian economic data has been robust. Friday’s employment report beat expectations and even though the details were soft, many economists suggest the data points to rising wage inflation. USDCAD is consolidating in a 1.3010-1.3190 range. A decisive break above 1.3200 will target 1.3380 while a break below 1.3010 targets 1.2950.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.