Safe Havens Lag As Tensions Take Their Toll

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Kiwi Leads Risk Assets On Positive Global Developments

High-risk assets including the New Zealand and Australian dollar continue to trade on good footing on Monday, rolling on from last week’s strong economic data.

Kiwi pushes higher in an attempt to break last weeks high of 0.6783, whereas Aussie, a little lagging, telegraphs some of this sentiment, albeit higher up than the 70c. mark.

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Meanwhile, of all commodity pairs, the Canadian dollar came under pressure only recently as oil bulls seem to be taking some profits off the markets. USDCAD could be heading for a fresh multi-day high provided the oil slide continues.

Pound Lower As Markets Price In Borris Win

The British pound is the worst performer so far on Monday. The possibility of a no-deal with Boris’ leadership and increased tensions between the UK and Iran pushed GBPUSD down to $1.2450 from a daily high of $1.2518.

The pound is likely to be affected by the PM race results. This is because there are no major economic updates for the week. Sentiment could continue like this until the end of the week.

Dollar Positively-Biased Ahead of NY Open

The US Dollar is a little quieter than expected at the start of the week as market participants shift their focus towards central bank rhetoric.  Regardless of little change in sentiment, the index trades a tad higher on the day. This is a result of last Friday’s upbeat consumer sentiment figures and spurred by Fed’s Bullard comments against aggressive rate cuts.

USDJPY, however, is quite upbeat on the day as safe havens seem to be affected by increased risk appetite. This can be attributed to renewed tensions between the UK and Iran.

The Swiss franc and gold are weaker as well. However, this has not been channeled through the markets as much as with the yen.

Equities Higher As Rate Cuts Stil On The Table

Despite markets discounted some of the aggressiveness Fed’s Williams signaled markets should expect, the chances of a rate cut have not decreased to a hold.

This allows equities markets to remain upbeat. SPX is trading higher near 2985. This follows along with expectations that this week’s corporations are going to report good earnings. 

Euro Muted Ahead of ECB Meeting

Euro is fairly muted against the dollar and other currencies as uncertainty around policy sets the tone. The pair trades within a limited trading range but remains above the psychological $1.12.

EURUSD is likely to remain indecisive before the upcoming ECB decision on Thursday. Nevertheless, it is possible the range level could shift to the downside.

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1 Comment
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