This week we have seen an early week rally on many major currencies (AUD, NZD, GBP) whilst gold has tanked to the downside along with the yen and swiss franc. NZD was the strongest yesterday, closing the day up 0.90% against the Yen and 0.89% against the USD. NZD has rallied significantly on the back of the RBNZ announcing that they are considering adding house prices to the RBNZ mandate.
Breaking it down
Yesterday was very news heavy, with service and manufacturing PMI data coming out of the USA (positive), France (mixed news), Germany (mixed news), and the European Union (mostly negative).
The Bank of England also had a hearing regarding their monetary policy reports, popping the GBP higher against the yen and the USD. Traders took Trump’s tweet in a good light, causing the ‘risk on’ rally that was seen.
Another piece of interesting news was that Iran announced plans to withdraw over 200m Euro from its sovereign wealth fund to compensate family members of those on the passenger jet shot down by the IRGC in January. The fund is meant to provide funding for the country's development projects not as a fund for the government to dip into.
One pair to watch the USD against in the near future is the USD/CNY as the People’s Bank of China has marginally increased the USD valuation against the yuan, as 20 Billion yuan was injected into the economy. PBoC added in 70 bn yuan, however 50 bn yuan matured, equalling the 20bn injection. In other news, Hong Kong has further tightened COVID 19 Restrictions, closing indoor venues.
Forecasts for currencies pairs have also made headlines this week. Some key ones to watch are:
USD : Morgan Stanley see the USD falling against other major currencies
Oil: Barclays see Brent and WTI both increasing in demand, with Brent forecasted at $53 and WTI at $50 /bbl.
This is WTI, approaching the Barclays forecasted at $50/bbl.
Make sure to manage your exposure and keep an eye on a news feed in the coming weeks.