Headline Watch

Headline Watch

Given the holiday thinned trading conditions in NY, traders were content to sit this one rather than mix it up. Japanese Yen as highlighted yesterday will continue to be the G10 focal point among growing debate if USDJPY will remain supported on dips, but the jury is certainly out on this one.While we should expect heightened susceptibility to headline risk however as “ scarehead” diminishes, odds are the markets rebound. In the meantime, traders remain on headline alert. In particular, the market is still intently watching how China responds to this unprecedented N. Korea escalation

Safe havens should stay in vogue as the headline risk remains fraught with danger.So we should expect CHF and JPY remain bid against USD near term, however in the absence of any surprises, FX dealers will key on how the US treasury markets open after the long weekend, which could prove to be the real litmus test for risk and the movements could deluge the FX markets

In addition to the geopolitical risk, traders focus now pivots to Fedspeak and debt ceiling concerns.

Euro

The G-10 markets traded nimbly as dealers took shelter amid scarce liquidity conditions in NY trade. Despite geopolitical issues I expect G-10 trade to remain very wary as the EUR consolidates ahead of the ECB on Thursday.

Japanese Yen

At some point, cooperative denunciation and hard hitting sanctions have to occur as a weak standing UN security council rhetoric has done little to restore tranquillity thus far. But with a gaggle of FED speak this week to add to the noise, conflicting signals may lead to a busy week.

Australian Dollar

The Aussie will be hogging a bit of the stage today with the RBA due out later this morning. No changes are expected, but the markets are on guard as Governor Lowe could lead to the Aussie strength given that AUDUSD is trading at the recent highs.

Given we expect little change in policy or statement so look for the Aussie bullish trend to remain in tact as commodity prices continue to firm on the up beat global growth narrative

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

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and 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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