Commodity Slide Feeds Forex Fear
eFXnews | Jan 14, 2015 06:41AM ET
Focus of the day:
"Copper prices joined the commodity market rout overnight, now trading 25% lower than this time last year. Equity markets are weaker across the board as well, after the US market reversed yesterday morning’s strong open.
The pick-up in volatility is almost as significant as the jittery nature of the market and while the VIX is above 20 today, I suspect it has further to rise.
CAD/JPY, meanwhile, will remain under the cost. However, the broader weakness in commodity prices is going to fuel further weakness cross the resource-exporting countries’ currencies. So, AUD/JPY is the biggest G10 FX mover overnight and AUD/USD has reversed almost all of the last week’s rebound. AUD/USD 0.80 remains, obviously, a major psychological support but in due course, this will break."
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