Another FX adventure land week is over.
We had everything this week from Italian Commedia del’Arte, to Spanish PM throwing away with the rests of old tapas mixed with a supposedly pretty hefty month end rebalancing. Important data came out, European CPI’s, US labour report, PMI’s all over and some GDP’s.
But we have to admit that the real rockstar was Trump again at the end of this week, slamming tariffs on the rest of the world, doing beautiful 360 rotations on North-Korea to make figure skaters look like hippo’s and then finally today ending with the cherry giving us the US NFP’s on a tweety plate. Well it may not be 100% the case but we all understood the same didn’t we?
And yet, coming out of the trenches we have to notice that interest rates moved, spreads been stretched to nearly breaking point, equity and commodity markets yoyo-ed
but FX? Have a look at my Sunday night opening post . We are less than 0.4% away max on the majors at the close having gone through all the colours of the rainbow.
To finds bigger movers we have to go to the emerging markets again, where valuations remain still under pressure. MXN is about 2% weaker on Nafta and election uncertainties just avoiding to keep the 20 mark vs USD. USDTRY avoided to break the 5 handle but found bids under 4.50 to close 4.65 and ZAR couldn’t keep up the good work to close the week about 1.5% weaker.
Well that leaves us a bit scratching our heads I’d say. Although we had a good run in the Forexflow brigade taking advantage of the week’s swings, we’ll need the market to digest everything that happened this week to take real directional trades on. I have one observation to make vs major currencies. The USD had every chance to shine this week and finally I say it’s a disappointment. I’m starting to flirt with the idea that we may not be far of the next USD sale season, especially if the US gets driven into a corner over trade wars by the rest of the world jointly, which is now becoming a real risk. Through WTO? I don’t know . Tomorrow? Probably not that fast .We’ll see but the rest of the globe is not going to wait for the US to continue to do business and getting saloon doors slammed in its face each day DT wakes up the wrong side of the bed There may be a next tectonic shift coming up, unless he changes tactics.
Well then, the man himself says you will have a great weekend because he KNOWS!
Thank you all for your increasing interest in what we do and wonderful interaction deriving from it. We learn as much as we hope we are helping you.
Enjoy, do funny things, share precious time with the ones you care about and have a peaceful weekend.
See you next week.