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Ruble slides down after Argentinean peso

Ruble slides down after Argentinean peso

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Jim Anderson - Public Relations

On Wednesday, August 28, the ruble fell completely discouraged and did not notice either positive news or the rising oil price. As a result, at the close of trading, the US dollar exchange rate "for tomorrow" again grew, adding another 36 kopecks (+0.54%), up to 66.8 rubles, and the euro didn't lag behind, having risen in price by 29 kopecks. (+0.4%), up to 73.98 rubles.

Perhaps the main negative factor that pushed the ruble down was the news from Argentina, whose authorities reached out to the IMF with a request to defer payment of debts. Recall that in 2018 Argentina received funding from the International Monetary Fund, the amount of financial assistance exceeded $56 billion. Probably, the country’s authorities are asking for postponement due to the election campaign, where, as shown by recent primaries, the current president is doing not good.

However, amid the recognition by the Argentine Ministry of Finance of the inability to repay the debt to the IMF in time, the Argentine peso collapsed on Wednesday by 3% against the dollar, pulling the currencies of other Latin American countries down. Brazilian real fell yesterday against the dollar by almost a percent, the Mexican and Colombian pesos lost a little less, about 0.2%, and the Colombian peso fell in price, but only by 0.06%.

Today, amid global instability, the ruble at the opening may again become lower. The forecasts for the dollar are up to 66-67 rubles per dollar and up to 73.5 -74.5 rubles per euro.

 

Pound collapsed on BBC post

Pound collapsed on BBC post

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Erik Holm - Head of media

The government of British Prime Minister Boris Johnson is going to ask Queen Elizabeth II to extend the break in parliament until, mid-October, which will greatly complicate the attempt of lawmakers to block Brexit without a deal, reports the BBC. The pound fell in reaction to the news.

According to the plan, all parliament’s work will be suspended from about September 11 to October 14, when the Queen will open a new session of parliament, reports Laura Kenssberg from the BBC on Twitter. The Prime Minister’s Office did not respond promptly to Bloomberg’s request for comments. Parliament should resume work after the summer holidays on September 3. The pound fell in the moment by more than a 1% to $1.2155. The pound previously declined at the close of positions by hedge funds. Options traders do not give preference to either side: risk reversals are neutral.

The Bloomberg Dollar Spot Index has stabilized as the yen rises again, offsetting the decline in the Asian session and reached new intraday highs after the pound fell. The yield on 10-year treasury bonds remained virtually unchanged – 1.48% after falling to 1.44% on Monday, the lowest level since July 2016. Profit-fixing sales appear in 10-year securities, causing the promotion of long positions. However, overall, the flows are rather modest, according to two traders in Asia.

The New Zealand dollar is falling against most major currencies as investors prepare for a possible increase in trade tensions between the US and China. Qiwi fell to a new four-year low, as speculation is mounting that the Reserve Bank of New Zealand will weaken policy faster than its Australian counterpart. This fact prompted traders to buy AUD / NZD. The Australian dollar fell at the start of trading after a more significant than expected decline in construction, which dampened expectations of positive GDP data next week. NZD / USD drops 0.6% to 0.6326, the weakest level since September 2015. AUD / USD is down 0.3% to 0.6735.

The yen has risen on the fears about the consequences of a trade war

The yen has risen on the fears about the consequences of a trade war

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Erik Holm - Head of media

On Tuesday, the yen rose against the US dollar. Concerns over the recent escalation of the ongoing trade war between the US and China have led to increased demand for defensive assets.

This month, the world’s stock markets fluctuate after the developments in a trade conflict. U.S. President Donald Trump said on Monday that Chinese officials called him to continue trade negotiations. The Chinese side refused to confirm this statement. Trump’s statements helped to slow down a sharp drop in world stock markets after the United States and China announced a planned increase in trade duties on each other’s goods on Friday. However, concerns about the trade conflict remain. Since there is no clear path to resolve the conflict, which has a devastating effect on the entire global economy.

By 9:00 London time, the dollar depreciated by 0.37% against the yen to 105.72. The yen is considered the currency of the “safe haven”, the demand for which has traditionally increased during times of political or economic instability. The Japanese currency also rose by 0.6% against the Australian and New Zealand dollars.

The US dollar index, which shows the purchasing power of the dollar against a trade-weighted basket of six major currencies, fell by 0.17% to 97.81

The official yuan rate has been updated for at least 11.5 years due to fears that the ongoing trade conflict is causing significant damage to the Chinese economy. The euro exchange rate changed slightly at the position of 1.1106.

The British pound was trading at 1.224 after falling by 0.5% on Monday. Investors have changed their minds on whether British Prime Minister Boris Johnson will be able to convince the EU of the terms of Brexit.

On Monday, Johnson said that he was ready to postpone Brexit negotiations with EU leaders to the last moment before October 31 and, if necessary, decide on leaving the EU without a deal that day.

Forex: trade wars remain the main theme

Forex: trade wars remain the main theme

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Jim Anderson - Public Relations

At the end of the week, a new round of escalation of the trade war between the United States and China took place. Recall that at first China introduced additional duties on the import of goods from the USA of $ 75 billion. In response to this, US President D. Trump raised the tariff for importing Chinese goods of $ 250 billion from 25% to 30%. The decision will enter into force from October 1. The remaining $ 300 billion worth of goods will be taxed at 15% (not 10% as previously planned) from September 1, Trump added.

This increase in tension instantly triggered an escape from risks, and over the weekend the markets continued to recoup this topic, seeking salvation in safe assets.

As a result, the new week began with large-scale gaps reflecting increased demand for such safe harbors as the yen, treasury and gold, and the players’ withdrawal from risky assets like oil, stocks, and currencies-antipodes.

USD / JPY opened with a bearish gap and updated multi-year lows at 104.50. The crosses that involved the yen also declined everywhere. Ozzy tested the area at 0.67, while the Qiwi dipped to 0.6341. Gold opened with a large bullish gap and rushed above 1550 USD, although it is now trading in the area of 1542 USD.

However, subsequently, the markets managed to calm down a bit against the background of China’s comforting assurances that the country is opposed to an escalation of the trade war. This allowed the USD / JPY to jump to almost 105.80, (although the pair immediately rolled back in the direction of the level of 105). AUD / USD tried to test the 0.6750 area. As for the euro and the pound, they held the Asian session in narrow ranges.

 

USD / JPY remains above 106.50 pending Powell's performance

USD / JPY remains above 106.50 pending Powell's performance

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Jim Anderson - Public Relations

The pair USD / JPY rose above 106.50 on Friday, however, the activity of the players remains low in anticipation of the speech of Fed Chairman Powell in Jackson Hole. By the time of writing, the pair was trading with an increase of 0.2% at 106.62.

The weak PMI data released yesterday in the manufacturing and services sectors put pressure on the dollar, but it is supported by optimistic comments by the head of the Federal Reserve Bank of Philadelphia (Harker) and the head of the Federal Reserve Bank of Kansas City (George). Both representatives of the Fed said that there is no need to cut rates at the moment.

Later today, we are waiting for comments by Fed representatives Bullard, Kaplan, Mester, and Harker on the sidelines of the Jackson Hole Symposium, but all the players' attention is focused on the speech of Fed Chairman J. Powell at 15:00 London time. Now the US dollar index is trading with an intraday increase of 0.23% at 98.45.

Meanwhile, on Friday, the 10-years yield has been growing for the third day in a row and is trading at an intraday increase of 1.7%. Despite comments by the Global Times editor that China will soon unveil a plan to introduce retaliatory duties on a number of US products, markets remain positive.