Friday 04.05.2018 FX closing rates
Global warming must be kicking in looking at how the river Thames banks evolved ….
It was hot in the markets too with the USD throning high above all the rest. New monthly highs were reached vs all currencies this week on wider interest rate spreads, tax related repatriations, ongoing better data than its peers with the exception of wages, the feeling that Trump is winning battles on the trade front and EM countries feeling the heat over rising hedging costs for US debt. Do read Ryan’s piece and updates we made our liveblog re the EM over the day.
And… the weakness of other majors, EUR is struggling with a slowdown, GBP ditto plus continuous political uncertainty over Brexit and a fierce repricing of the next rate hike expectations.
I should say almost all currencies as one kept its ground barring a short term blip and that is CAD, benefiting from a different outlook around Nafta than Mexico and better data forcing Poloz to swallow his bearish feathers a bit this week.
Another one making a comeback in the latter part of the week was the JPY, mostly through the crosses. Uncertainty about how much China is willing to give in to the US, EM woes, a fragile Middle East situation and exporter offers having given enough liquidity to the USD purchases up to 110 are putting the JPY back on par with the USD at the close compared to last week and a fair bit stronger vs all the rest.
Special word for the SEK, making a 2% roudtrip against the EUR this week despite unhidden efforts from the Riksbank to be more bearish than needed.Quite heavy offers 10.65/70, reported as they got hit in our live room, finally capped the pair, a few us went short up there for the longer term.
Next week traditionally post NFP’s sees a quiet start on Monday as well as Australia Labour Day and UK Early May Bank Holiday Monday.
The market could be quiet but I would rather cautiously call it illiquid as we can get some China-US headlines in post meeting reactions and interest rates and EM currencies will still need close monitoring.
It was another very good trading week on Forexflow, the team did well and, looking at the comments, our fellow traders and readers too. We thank you for your continuous support, pertinent comments which make all of us better, and for the laughs we share.
Have a great weekend, get a suntan, I will here in London, it could be the only weekend of the year to get one …
See you on Sunday night for the opening when Japan returns from Golden week.
Stay safe and don’t do what I wouldn’t do