Manchester bombing leaves APAC markets in a sombre mood

May 23 Asian currencies were subdued on Tuesday,
with a suicide attack in Manchester dampening a mild resurgence
in risk appetite, just as investors had begun looking past the
political crisis still simmering in Washington.
    Meanwhile, the euro floated near a six-month high
after German Chancellor Angela Merkel said the currency was too
week, whereas the pound sagged on news of a blast at a concert
in Britain's Manchester which killed 19. 
    The dollar, which slipped to more than 6-month lows
in the previous session, remained weak.
    "Market reaction has been fairly muted in Asia in response
to the Manchester blast. The yen did strengthen slightly
initially, but this has partly unwound," said  Khoon Goh, head
of Asia research at Australia and New Zealand Banking Group in
Singapore.
    The mild hit to the risk-on sentiment manifested in a
sell-off in the Korean won and the Taiwan dollar
, the biggest gainers in the previous session.
    The won was 0.3 percent lower, while the Taiwan dollar fell
0.2 percent.
    Traders say investors will now shift their focus to the FOMC
minutes due on Wednesday, for any hints of the Fed's rate cycle
plans for the year.
    "The market is expecting the Fed to stay on course for a
rise in June. But that's priced in about 70 percent, so, there's
a bit of an upside there," said Stephen Innes, a senior trader
for FX broker OANDA.  
    "But the thought here is that if the Fed starts to ratchet
it up towards the end of the year, then there's some appeal for
the dollar to go higher. This may be tempering expectations
across global markets."

Reuters

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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