Home Forex Market News Yen benefits from risk-off, while aussie rises after Chinese exports

Yen benefits from risk-off, while aussie rises after Chinese exports

The yen was the main beneficiary of the selloff in risk assets around the world, gaining against both the US dollar and against the euro.  Traders sought to buy back yen that was funding riskier trades and Japanese investors repatriated some funds as a result of the correction in risk assets.

Dollar / yen traded as low as 107.06 while euro / yen fell to as low as 135.58 as a result of safe haven related yen strength.

The US dollar was under some pressure after the new Fed Vice Chair Stanley Fisher said that the removal of monetary accommodation would be slower if weaker global growth affects the United States.  As a result of Fisher’s speech on Saturday, traders marked down the probability that US interest rates will rise by June of 2015 to less than 50%.  Euro / dollar rebounded to 1.2677 as a result, up from previous week’s close around 1.2630.

The normally risk-sensitive Australian dollar also rebounded to 0.8732 – partly as a result of the weakness in the US dollar and partly because of stronger-than-expected Chinese exports’ data for September.  Chinese exports were up 15.3% year-on-year, whereas analysts were expecting an 11.8% increase.  Imports also beat expectations.  China is Australia’s biggest trading partner.

The economic calendar is light today and there are holidays in Japan and the United States although stock exchanges in the United States will remain open.  Liquidity is expected to be thin.  The focus will mainly be on whether risk assets will continue to sell off and how policymakers worldwide plan to counter a possible economic slowdown.

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