Tuesday 19 August 2014

DAILY FOREX REPORT FOR 20 AUGUST 2014

MARKET HEADLINES
 
Asia forex edge higher; yuan hits 5-month high
Most emerging Asian currencies crawled higher on Tuesday with the Chinese yuan at a five-month high as geopolitical tensions over the conflict in Ukraine eased. The firm dollar, however, kept trading ranges tight. Spot yuan rose 0.1 per cent to 6.1368 per dollar, its strongest since March 13, amid confidence in China's economy even though the central bank set a lower official guidance rate. The Taiwan dollar advanced on strong domestic stocks, while the Malaysian ringgit rose on solid economic fundamentals. Regional equities gained after Russia's foreign ministry said on Monday a 'certain progress' was achieved during talks among Russia, Ukraine, Germany and France over the weekend. Still, the easing tensions over Ukraine, as well as a solid US housing data, supported the dollar. Investors are closely watching Wednesday's release of minutes from the Federal Reserve's July policy meeting and comments from a global central bankers' meeting in Jackson Hole, Wyoming, starting on Thursday. "I wouldn't expect strong hawkish signals from Jackson Hole," said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul. "If expectations of a delay in the Fed's interest hike build up, Asia FX will strengthen further. Weak economic fundamentals in Europe may also drive more funds to Asia."
Dollar firm in Asia as Ukraine tensions ease
The dollar held steady in Asia on Tuesday as concerns over a Ukrainian clash with Russia eased, while investors looked to a speech by the US Federal Reserve chief this week. In midday Tokyo trade, the greenback rose to 102.62 yen, up from 102.57 yen in New York and 102.32 yen in Tokyo earlier Monday. The euro was weaker at $1.3351 from $1.3363, while it bought 137.04 yen against 137.05 yen in US trade. "There was a general easing of geopolitical tensions, with no new developments being good news in Ukraine and Gaza," National Australia Bank said in a note. The Japanese yen and Swiss franc, considered safe-haven currencies in times of turmoil, notched up gains Friday after Ukraine said it had destroyed some Russian armoured cars, sparking fears of an escalation. Moscow dismissed the claim. A weekend meeting of the two nations' foreign ministers, which also involved officials from France and Germany, concluded with an agreement for the sides to meet again and continue trying to de- escalate the worst East-West crisis since the Cold War. In the Gaza Strip, a new 24- hour ceasefire came into effect Tuesday after Israeli and Palestinian negotiators agreed to extend a five-day truce, minutes before a midnight deadline, to allow for further talks on a long-term deal.

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1 comment:

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