USDJPY, H1
The Dollar and Yen have weakened against most other currencies as risk appetite came coursing back. The narrow trade-weighted USDIndex (DXY) dipped by over 0.3% in printing a five-day low at 99.60, correcting from yesterday’s eight-day high at 99.97. EURUSD concurrently lifted to a five-day high at 1.0973. Sterling, which is continuing to correlate with global stock markets and is getting a bounce from a cooling of the political frenzy in Westminster and rumors of the EU relaxing a “fisheries” issue in the trade talks, surged by over 1% to a thirteen-day high at 1.2326, while GBPJPY has risen by a similar magnitude in printing a two-week peak, and EURGBP has fallen to eight-day lows under 0.8900. EURJPY hit a five-day high, while Yen underperformance lifted USDJPY to a six-day high at 107.93, before collapsing into the US open under 107.40. The commodity currencies have, not surprisingly, been outperforming. AUDUSD rallied by over 1% in pegging an 11-week high at 0.6587. USDCAD dropped to a four-week low at 1.3848. July WTI crude prices gained by over 3% in posting a high at $34.54, which is just 12 cents shy of the 11-week high that was seen last week. In stock markets, Japan’s Nikkei 225 closed up by 2.55%, its highest since March 5. The Hang Seng and the Shanghai Composite index also rallied, the former by 1.8% and the latter by 1%.
Ongoing news of economic reopening around the world, along with cheap money, have fed the risk-on theme, which is offsetting the rising tensions between the US and China. Hopes for the rapid development of a vaccine for the coronavirus is also in the mix. US firm Novavax says it has begun enrolling participants in the first human study of its vaccine, while Oxford University is now already weeks into human tests, and says its vaccine could be ready as soon as September. Germany’s Ifo institute said that the mood among exporters has improved and the US Case Shiller home price index rose 1.1% to 222.2 in the March 20-City index, a record high, after rising 0.5% to 219.9 in February.
US Equity markets have all opened on the front foot with the S&P500 at 3016, up 60.7 points or 2.05%, the NASDAQ index up 148 points or 1.59% at 9474 and the Dow Jones Industrial Index 30 (124 years old today) up 575 points or 2.35% at 25040.
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Stuart Cowell
Head Market Analyst
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