Asian Markets Turnaround as The Dollar Takes a Breather

This morning, Asian markets mounted a turnaround with an impressive recovery as the US Dollar took a time out and oil prices recovered a bit.

The US Dollar Index, which measures the greenback against a basket of currencies, eased back from its 13 year high of 101.48 that it reached last week. The Dollar, as of 09:00 am GMT time, was trading around 101.12. The Dollar’s climb higher is starting to run out of some steam as markets have now fully priced in Donald Trump’s victory for President of the United States.

In Japan, the Nikkei 225 stock bourse was up 0.49 percent, slightly off from session highs as the yen’s move lower stalled.

In Australia, the S&P ASX 200 was virtually flat after moving lower. The recovery was spurred by the energy sub-index, which rose 1.4 percent and its gain capped by the gold sub-index which lost another 2.4 percent on the day. In South Korea, the Kospi Composite Index swung higher after losing as much as 0.3 percent. Investors were rattles after news surfaced that prosecutors considered President Park Geun-hye was an accomplice in the ongoing investigation into corruption. This will likely spur more protests for President Park to step down or be impeached.

Looking into US bond yields, US Treasuries are now at their highest point this year. The US 10 year note is at 2.3423 percent and the 30 year note is at 3.0206 percent. The epicenter of the volatility of the financial markets is the US Treasury market as the moves here have been incredible, to say the least. Yields have been climbing since Trump won the US election for president as his win should stoke inflation.

This morning, the People’s Bank of China set the yuan’s mid-point at 6.8985 against the US Dollar. The last mid-point set was at 6.888. As of 10:55 am HK time the USD/CNH was trading at 6.8960.

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David Frank

David is an experienced Forex and bond trader and has his MA and PhD in Economics. He is a behavioral economist and technical analyst who has been trading in the currency and debt markets for over a decade. He has worked for international brands such as Goldman Sachs and AvaTrade. As an economist and trader, David believes in the big picture by blending together technical analysis with fundamentals behind the scenes in the Forex and global bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex, debt securities (bonds) and commodities. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using a quicker, chart related analysis for day trading.