Asian Session – Yen softer as Ukraine crisis does not escalate
March 18, 2014 7:39 am
Risk sentiment has held up well and safe haven assets have been unwound after the easing of geopolitical risk. The yen weakened 0.7% against the dollar since Monday while the euro rallied back above the key 1.39 level.
Markets participants were relieved that the threat of immediate military conflict in Ukraine receded and the West’s reaction to the Crimean referendum vote was relatively mild. The US and the EU merely imposed personal sanctions on Russian and Crimean officials and did not proceed with drastic economic sanctions as was initially feared. However, focus will still remain on this Ukraine crisis, especially after Russian Putin announced early on Tuesday that Russia will proceed with annexing Crimea.
Meanwhile, market focus turns to another key risk event – the Federal Reserve two-day policy meeting begins today and will conclude with a policy announcement on Wednesday. It will be Janet Yellen’s first meeting as Chair of the Fed.
The Fed has so far trimmed its bond buying program by $10 billion a month in two policy meetings to bring the stimulus program down to $65 billion a month. A further scaling back of stimulus would be positive for the dollar.
Data to look forward to today will be the German ZEW economic sentiment index for March, which is forecast to dip to 53 from a prior 55.7. A disappointing reading could impact the euro negatively. Also Euro zone trade balance data are due today, and are forecast for 12 billion euros versus a prior 13.9 billion.
During the Asian session today, the dollar consolidated gains versus the yen after gaining 0.07% on Monday, before easing slightly to trade at 101.63 as focus turns to the Fed meeting.
The euro was up 0.05% against the dollar to 1.3928 while the pound gained 0.07% versus the greenback to 1.6642. A key risk event for sterling will be the UK budget announcement on Wednesday as well as UK jobs data.
The aussie remains above 90 US cents and was briefly boosted above 91 cents following the RBA policy meeting minutes today. The Australian dollar ended the Asian session at 0.9067, down 0.18%.
Risk sentiment has held up well and safe haven assets have been unwound after the easing of geopolitical risk. The yen weakened 0.7% against the dollar since Monday while the euro rallied back above the key 1.39 level.
Markets participants were relieved that the threat of immediate military conflict in Ukraine receded and the West’s reaction to the Crimean referendum vote was relatively mild. The US and the EU merely imposed personal sanctions on Russian and Crimean officials and did not proceed with drastic economic sanctions as was initially feared. However, focus will still remain on this Ukraine crisis, especially after Russian Putin announced early on Tuesday that Russia will proceed with annexing Crimea.
Meanwhile, market focus turns to another key risk event – the Federal Reserve two-day policy meeting begins today and will conclude with a policy announcement on Wednesday. It will be Janet Yellen’s first meeting as Chair of the Fed.
The Fed has so far trimmed its bond buying program by $10 billion a month in two policy meetings to bring the stimulus program down to $65 billion a month. A further scaling back of stimulus would be positive for the dollar.
Data to look forward to today will be the German ZEW economic sentiment index for March, which is forecast to dip to 53 from a prior 55.7. A disappointing reading could impact the euro negatively. Also Euro zone trade balance data are due today, and are forecast for 12 billion euros versus a prior 13.9 billion.
During the Asian session today, the dollar consolidated gains versus the yen after gaining 0.07% on Monday, before easing slightly to trade at 101.63 as focus turns to the Fed meeting.
The euro was up 0.05% against the dollar to 1.3928 while the pound gained 0.07% versus the greenback to 1.6642. A key risk event for sterling will be the UK budget announcement on Wednesday as well as UK jobs data.
The aussie remains above 90 US cents and was briefly boosted above 91 cents following the RBA policy meeting minutes today. The Australian dollar ended the Asian session at 0.9067, down 0.18%.
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