April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
Yen slips in Asia
On Wednesday, the Japanese yen headed south versus its major peers because investor risk appetite improved during Asia trade, although worries over decelerating global surge and US-China trade clashes will probably cap gains in risky assets.
As a matter of fact, the Japanese yen dived by 0.25% against the US currency ending up with a reading of 109.62. Versus the Australian currency, it slipped by 0.5%.
As anticipated, the Bank of Japan kept monetary policy intact and reduced its inflation estimate, with a greater-than-anticipated dive in December export data earlier in the day giving an emphasis to the necessity for continued support for the Japanese trade-reliant economy.
Moreover, the Australian dollar headed north by 0.2% against the evergreen buck reaching $0.7137.
For recent week the foreign exchange market has been whipsawed because investors attempted to come to terms with an array of issues from Brexit to decelerating global surge and the outlook for key major financial institutions.
Nervousness around global surge as well as trade clashes - these are the factors powering the financial markets now, as some analysts explained.
The International Monetary Fund had its 2019 and also 2020 global surge estimates trimmed, explaining that move by a greater-than-forecast deceleration in the Eurozone and China. The organization also stressed that the inability to resolve trade clashes could further impact a decelerating global economy.
The previous year’s surge in China turned out to be the slowest since 1990. What’s more, it’s braced for weakening further in 2019 before stimulus measures start kicking in.
Market participants are hoping for a significant progress in US-China trade negotiations, with the tariff conflict between the world's leading economies already affecting financial markets as well as global demand.
A report by the Financial Times that America had rejected the Asian country’s proposal for preparatory trade negotiations impacted risk sentiment overnight. However, later it was debunked by a White House adviser.
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UK Prime Minister was placed in the intensive care. As a result, the British pound plummeted dramatically today.
Commodities (iron ore, oil) and commodity-linked currencies (AUD, CAD) surged. West Texas Intermediate has reached $75 a barrel, while Brent rose to the highest mark since October 2018.
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Turkey’s central bank governor was at a crossroads: to hold interest rates and take a risk to be fired like it was for three governors before him, or to comply with the president, to cut rates, and to risk the market. Let’s find out, how to react to the rate cut.