ETHICAL CURRENCY DAILY BRIEF

 

 

The Ethical Daily Brief is a free email sent out each morning with information about overnight market movements and insights into the issues of the day. The brief is free and will help you keep an up-to-the-minute eye on the currency markets.

 

Daily Brief - 21/08/2017

Hong Kong Office

 

British Pound

 

FXStreet: The Great British Pound traded in a lacklustre range for the majority of last week after failing from the 1.30 handle in the aftermath of a lower than expected inflation reading in the UK. Falling to a one-month low against the Greenback, the Sterling could not recover as it consolidated between 1.2830 and 1.2910. 


On the domestic front this week, investors will be keen to see the release of second-quarter GDP figures on Thursday. Recent news suggests BOE Governor Carney will not be in attendance at this year’s Jackson Hole Symposium where central bankers discuss monetary policy. The Sterling opens this morning at 1.2870 against the US Dollar.

 

US Dollar

 

Reuters: The dollar edged up in early Asian trading on Monday, moving tentatively away from the four-month low against the yen plumbed in the previous session on concerns that White House personnel changes will impair President Donald Trump's ability to pass tax reform and stimulus measures. Investors looked ahead to the U.S. Federal Reserve's annual central banking symposium in Jackson Hole, Wyoming on Thursday and Friday. 


The dollar was up 0.1 percent at 109.265 yen, after it slipped as low as 108.605 yen on Friday, its lowest since late April. On Monday, the euro was steady on the day against its major counterparts at $1.1751 and 128.39. The dollar index, which tracks the greenback against a basket of six major rivals, added 0.1 percent to 93.477. 


Speculators reduced their negative bets on the U.S. dollar this week to $8.84 billion from $10.23 billion in the latest week through Aug. 15, Reuters calculations based on Commodity Futures Trading Commission data showed on Friday.

 

Japanese Yen

 

FXStreet: Currently, USD/JPY is trading at 109.19, up -0.05% on the day, having posted a daily high at 109.38 and low at 109.19. Despite the N.Korea risks rearing its ugly head again this week and at the start of the FX week in Asia, USD/JPY is relatively stable in the open of Tokyo and supported at 109.19/20. 


For the week ahead, Japan's CPI will be a focus for traders, and analysts at Nomura forecast July all-Japan core CPI inflation to be 0.5% y-o-y, marking a rise from June. They also expect August Tokyo core CPI inflation to be higher than in July. For the US, the analysts expect durable goods orders on Friday to be a 0.3% m-o-m increase in July core durable goods orders (excluding transportation goods), after a 0.1% increase in June.


Valeria Bednarik, chief analyst at FXStreet who expects yen strength to prevail this week, explained that on a technical basis and in the shorter term and according to the 4 hours chart, the pair is well below bearish 100 and 200 SMAs.

 

Global Markets

 

Reuters: Asian shares were tentative in early Monday trade as investors remained unconvinced about U.S. President Donald Trump's ability to fulfill his economic agenda, even as the departure of his controversial policy strategist raised hopes of some progress. 


MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.07 percent while Japan's Nikkei was off 0.4 percent. Comments last week from Fed officials suggested the stock market's steady rise, still low long-term bond yields and a sagging dollar are girding the Fed's intent to raise interest rates again this year despite concerns about weak inflation. 


Oil prices held their big gains made on Friday on the back of a fall in U.S. drillers' rig counts. U.S. crude futures were unchanged at $48.48 per barrel while Brent futures were down slightly at $52.60 per barrel. 

Daily Brief - 21/08/2017

London Office

 

British Pound

 

Bloomberg: Brexit may dominate factors influencing the pound’s fortunes again this week, with the U.K. set to lay out its position in at least three areas of negotiation with the European Union.

 

Uncertainty about the next round of Britain-EU talks due by month-end could weigh on sterling, which was the worst-performing Group-of-10 currency last week. The U.K. is said to be preparing to publish on Monday details on how it will treat confidential EU information obtained before Brexit and on goods placed on supply chains in the EU single market.

 

US Dollar

 

TOKYO (Reuters) - The dollar steadied on Monday, edging away from four-month lows against the yen plumbed in the previous session as investors turned their focus from political turmoil in Washington to the Federal Reserve's annual central banking conference in Wyoming.

 

The dollar was flat on the day at 109.22 yen, after slipping to as low as 108.605 yen on Friday on concerns over President Donald Trump's ability to push through tax reform and stimulus measures.

 

It largely shrugged off the University of Michigan's consumer sentiment index, which improved to its strongest in seven months, reflecting confidence in the outlook for the economy and in personal finances as the U.S. stock market holds near record highs.

 

Reports of the impending departure of senior White House adviser Stephen Bannon, known for his economic nationalist views, were confirmed on Friday. Trump's decision to fire Bannon could undermine his support from far-right voters but might ease tensions within the White House and with party leaders.

 

South African Rand

 

Invetsec: Economic reality is starting to bite and very soon, the ANC led government will have more problems on its hands than just the political posturing and electioneering ahead of the ANC’s elective conference in Dec. Poor economic policy, no accountability at an SOE level, an economy performing well below its peers and global growth and little in the way of credible strategies to correct this trajectory, mean that SA’s tax collections are likely to be well below what was budgeted.

 

Business Day is running with a story this morning detailing how the size of the shortfall could be the largest since the financial crisis raising the probability that the country slips to junk, possibly sooner than expected.

 

Currency Rates

 

 

As of 21-08-17 10:10 am HK time