Mixed Session For Asia, GBP Dives

Depending on what part of the world you are in today, stock markets are either falling due to trade tensions or rising due to trade hopes.

All in all, the differential price action across Asia and European exchanges probably reflects weeks end position adjustments, and markets have been operating in a data vacuum. Prices this week, being driven by headlines, mostly from Washington D.C.

Asia stock markets have had a mixed day with the Nikkei 225 falling 0.80%, the South Korean Kospi falling 1.05% and the Hang Seng falling 0.45%. Mainland China though finished in the green, the CSI 300 rising 0.30%, the Shanghai Composite rising 0. 13% and the Shanghai A50 increasing 0.05%. Given the words “trade worries” have been bandied around all over Asia today, it is surprising that Mainland China bucked the trend. One suspects that ahead of China’s 70th birthday on Tuesday, officialdom there will make sure nothing “untoward” happens to mainland indices.

Europe seems to be using the words ” trade hopes” this morning to explain away the rise in most continental bourses today. The increase by the U.K. FTSE 100 by 0.97% can be easily explained by this morning’s drop in the British Pound. The Dax 30 and IBEX 35 are both 0.50% higher today with the CAC 40 rising by 0.25%. Again, I feel that the rallies are just as easily explained by the EUR/USD being 1.0% lower than the start of the week, at 1.0925 in early Europe.

Currencies are mostly flat in Europe with the FX market looking like it is ready for the weekend already. Only the GBP has moved noticeably today. Bank of England MPC member Michael Saunder’s, gave some very dovish comments about the direction of U.K. monetary policy. It sent GBP tumbling from 1.2325 to 1.2280 which, combined with Brexit uncertainty, leaves Sterling poised to finish the week 1.50% lower against the greenback.

 

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.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst - Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia and the New York Times. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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