Australian Dollar

From Friday: Current yuan exchange rate is within a reasonable and balanced range,” the State Administration of Foreign Exchange (SAFE), China’s fx regulator, said in a statement on Friday.

Asian stock markets end the week on a poor note, having absorbed the Biden inauguration and initial policy reversals, with commodity currencies weaker against USD as gold and silver remain relatively steady.

  Last night saw the frothiness in risk markets take a small pause as bond yields rose slightly on the lower than expected US weekly jobless claims, as the latest ECB meeting also made no waves.

Share markets are rising in co-ordination following the Biden inauguration, with risk appetite soaring overnight, with the USD in full retreat as gold and silver is breaking out to new highs.

Via Societe General: EUR/CNH may be the most important FX pair in the world now ◼We move from Janet Yellen’s confirmation hearing to the new President’s inauguration, which is likely to see more pomp and ceremony and less cause for markets to move.

Asian share markets are somewhat mixed and unsettled going into tonight’s newsflow with Trump “serving” his last day as US President, with focus and realisation of both further stimulus and big tax increases confusing risk appetites.

A couple of charts today show that there is a developing problem for the short USD trade that is currently dominating markets.

Two events changed risk appetite overnight with the closely watched German ZEW survey and Janet Yellen’s testimony in Congress supporting the bullish mood on Wall Street as traders returned from the US long weekend.

Asian share markets are no longer unsettled as the realisation that an adult will be in the Oval Office in a few days kicks in the risk spirits with broad gains across most markets and S&P futures looking bright for the return of traders from the US long weekend.

The US long weekend had a deleterious effect on trading volume and hence volatility overnight with most risk markets remaining in stalled mode as they await there queues from Wall Street.

Via Westpac: 1.

Asian share markets remain unsettled after Friday’s fizzer on Wall Street, as the upcoming Biden presidential inaguration later this week is possibly hindering risk taking.

Friday night saw risk markets continue their reversal of confidence as Biden gets closer to taking the presidency and a very large – and taxing (sic) – stimulus package comes forth.

Asian share markets are very unsettled going into the final trading session of the week, with the Biden stimulus plan not landing on the right note for risk takers as higher taxes are definitely on the agenda.

Action on risk markets was muted last night due to the release of the latest jobless claims in the US, followed by the post-close Biden stimulus package announcement, with the former unexpectedly nearly hitting the 1 million mark.

Via ING: USD:Biden’s $2tn plan causes re-steepeningBack-end US yields are back on the rise following a media report that claimedBiden’s pandemic relief stimulus will likely be around $2tn–bigger than what most investors were forecasting–and will include direct payments to families, state and local funding.

Asian share markets are moving higher almost in unison, with Australian shares lagging but finally putting in a decent bid as Japanese stocks head above new decade highs.

It was the return of the king last night – king dollar that is – with yet another reversal in USD due to a very solid US inflation report, with core inflation bang on target while year on year inflation actually ticked higher than expected.

Asian share markets are quite mixed with a big inversion in direction today as Japanese stocks rallied, Chinese bourses dropped while the ASX200 did 2/5ths of nothing again.

Last night saw a solid reversal in USD, blamed in part on the Fed with several speeches by Federal Reserve officials overnight putting a hawkish bent on their position in 2021.

Via ING: USD: Impeachment vote may have somewhat limited impact The dollar has remained generally supported in early trading today as markets await new catalysts in the form of data releases or political developments in the US.

Asian markets are still very hesitant to take on more risk with the return of Japanese markets still not providing any catalyst for more upside, except on mainland China.