Key News
*German Recession Deepened in First Quarter, Bundesbank Says (Bloomberg)
* Emerging-Market Stocks, bonds Fall on Oil, Deepening Recession
(Bloomberg)
* Roth Says SNB to Buy Currencies as Long as Needed (Bloomberg)
*Euro falls vs dollar, yen on ECB uncertainty (Reuters)
The Event Agenda
The Morning Run-Down
Risk aversion is back on track this morning and it appears that the short term correction that has taken place, favoring risky assets, is over. US stocks are giving back all of last weeks gains, gold is higher, the interest rate markets are indicating lower yields, and yen crosses as well as emerging market currencies are all pointing lower. The dollar is higher against every major currency (ex- yen). And the Australian dollar– the relative outperformer on the way up– is taking the hardest hit this morning down 2.2%.
The technical picture looks more and more convincing for the next leg higher in the dollar as a safe haven trade. In my Currency Comments last Thursday I pointed to key reversal signal in the Australian dollar/ Japanese yen cross as a proxy for the break-down in risk appetite. That pair is down more than 3% this morning and leading the move lower in those trades in the risk-taking complex.
Disagreement at the ECB about a floor for short term interest rates and the uncertainty surrounding plans for “non-conventional” monetary policy (i.e. quantitative easing) continues to undermine confidence in the currency.
Meanwhile, leading economic indicators continue to print lower in Japan—the seventh consecutive monthly decline. The yen, however, is performing a bit better against the dollar today, propped up by risk aversion activity in the yen crosses.
Data and Charts of Interest
The AUD/USD held its 200-day moving average last week and broke trendline support today. Look for this pair to test its October lows of 0.6009.
The dollar index has suffered two sharp, but brief, corrections since beginning its trend higher last July.
Related posts:
- Friday Recap … October 30, 2009 Key News * U.S. Economy: Consumer Spending, Confidence Fall...
- Morning Run…May 19, 2009 Key News *U.S. Housing Starts Drop on Apartments,...
- Morning Run … August 17, 2009 Key News * Pound Drops as Home Sellers Lower...
{ 1 comment… read it below or add one }
I found your readings in currencies very accurate… CONGRATULATIONS.
What is the website to read about your comments on currencies? besides to sign up for a subscription on currencies…
Thank you much
angela