Forex: US Dollar Finds Support Amid Commodity Market Liquidation
Dailyfx | Apr 21, 2014 05:14AM ET
Talking Points:
- US Dollar Gains Amid Broad Liquidation Across Commodity Markets
- Follow-Through on Overnight Moves to be Tested as Liquidity Returns
- Yen Drops, Nikkei Gains as Soft Trade Data Drives BOJ Easing Bets
The US Dollar advanced in overnight trade in a move that appeared to mirror a selloff in the commodities space. over the weekend saying that Barclays, one the world’s largest players in the commodities markets, is planning to wind down a large portion of the business after a sharp slide in revenues.
Most commodities are priced in terms of the greenback. With that in mind, it stands to reason that a pre-emptive selloff reflecting the exit of major market participant would generate parallel declines in commodity prices and an advance from the benchmark currency. The magnitude of the move may have been amplified by thin holiday-induced liquidity, with key markets in Australia and Hong Kong as well as Europe offline for Easter Monday. It remains to be seen whether momentum carries through into US trade, when participation ought to see something of a pickup.
The Japanese Yen underperformed after the March set of Trade Balance figures revealed an unexpectedly large deficit of -¥1446.3 billion. Details of the report appeared more worrisome than the headline figure: the year-on-year export growth rate slowed to 1.8 percent, marking the weakest reading in a year. The outcome sent the benchmark Nikkei 225 stock index higher and weighed on the Yen in a move that seemed to reflect speculation increasingly weak economic news-flow will encourage the Bank of Japan to expand monetary stimulus efforts.
Get The News You Want
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.