Japanese Yen Pulls Back as Russian Stocks Advances After Crimea
March 18, 2014 8:14 am
The yen dropped down for the first time in six days versus the dollar as increases in Russian stocks and the ruble damped concern that Crimea’s vote to leave Ukraine would immediately lead to further turmoil in the region.
China’s yuan backslide to an 11-month low against the dollar after the central bank widened its exchanging band. The euro erased declines versus the dollar as the European Union and the U.S. imposed penalties on individuals in Russia amid the standoff over Ukraine. U.S. stocks bolstered as a report showed American factory production skyrocketed last month the most since August.
“There doesn’t seem to be any big escalation between Ukraine, the West, and Russia; it’s a pretty risk-on day,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc., said in a phone interview. “There was so much negativity priced in last week, it’s a relief so far. A lot of investors were expecting things would be way worse.”
The yen slumped against 15 of its 16 major counterparts, moving 0.4 percent lower to 101.77 per dollar at 5 p.m. New York time after empowering 1.9 percent last week. Japan’s currency relinquished 0.5 percent to 141.68 per euro. Europe’s 18-nation currency increased less than 0.1 percent to $1.3922 after declining 0.3 percent earlier.
The JPMorgan G7 Volatility Index shrank 13 basis points, or 0.13 percentage point, to 7.47 percent after leaping 25 basis points last week. The average this year is 7.88 percent.
Ruble Surges
Russia’s ruble rallied against all of 31 major counterparts as the Micex index of Russian stocks skyrocketed 3.7 percent after declining 7.6 percent last week. The currency empowered 0.8 percent to 42.7310 versus the central bank’s target basket of dollars and euros.
The currency “market seems to be very calm,” David Bloom, head of global currency strategy at HSBC Holdings Plc in London, said in an interview on Bloomberg Television’s “The Pulse,” with Francine Lacqua and Guy Johnson. “The market is not joining the dots and saying there’s a global problem. The market’s saying these are local isolated problems.”
The EU imposed “targeted sanctions against responsible Russians,” Danish Foreign Minister Martin Lidegaard said in a Twitter post after a meeting with his counterparts from the rest of the 28-nation bloc in Brussels. The measures include travel-visa bans and asset freezes, an EU official said. President Barack Obama ordered U.S. penalties on seven Russian government officials.
Crimean lawmakers set in motion measures for the Black Sea peninsula to leave Ukraine and join Russia after yesterday’s plebiscite, which EU and U.S. leaders have condemned as illegal. Russia has deployed about 60,000 troops along the Ukrainian border, the government in Kiev said.
‘Relief Rally’
“It’s a bit of a relief rally — some of that is the fact the situation didn’t escalate,” Brad Bechtel, managing director at Faros Trading LLC in Stamford, Connecticut, said in a telephone interview. “Right now the ball is really in the West’s court again.”
The yuan sagged down for a second day after the People’s Bank of China declared on March 15 the currency will be able to exchange as much as 2 percent on either side of a daily central bank reference rate, from 1 percent previously.
The decision underscores pledges from China’s leaders to make the exchange rate more market-based and advertise free movement of capital for investment reasons.
The onshore spot rate slide 0.5 percent lower to end at 6.1781 per dollar after dropping to 6.1818, the worst performing mark since April.
Aussie, Rand
Australia’s dollar and the Swedish krona led advances among the dollar’s 16 most-exchanged counterparts, skyrocketing 0.7 percent and 0.6 percent. Wespac Banking Corp. bring down its projection for further Australian interest-rate trims this year, bolstering the appeal of Aussie assets.
South Africa’s rand was the largest decliner, relinquishing 1 percent to 10.7751 per dollar before a report on March 19 projected to display core consumer prices rallied 5.3 percent last month from a year earlier, unmoved from January.
The dollar maintained its high note versus the yen as Federal Reserve data showed U.S. factory production increased 0.8 percent in February after a 0.9 percent decrease the prior month. An index of manufacturing in the New York region boosted to 5.61 this month, from 4.48 in February, the Fed Bank of New York reported.
The Standard & Poor’s 500 Index of stocks jumped 1 percent.
Treasury Yields
The yen backslide as yields on U.S. Treasury 10-year notes leaped, hiking the appeal of dollar-denominated assets. The yields rallied four basis points to 2.69 percent after relinquishing 13 basis points last week, the largest decline in two months. Yields on Japanese government 10-year bonds exchanged with a slight alteration at 0.62 percent.
Fed policy makers open a two-day assembly tomorrow.
The yen also slumped as Royal Bank of Scotland Group Plc said the Bank of Japan may be embarking on dovish rhetoric, helping to cap advances in the currency.
BOJ Governor Haruhiko Kuroda declared that the central bank will adjust financial policy without hesitation if it foresees a situation where reaching its inflation goal would be difficult, the Asahi newspaper reported on March 15, citing an interview. He reiterated the pledge today in parliament.
The Japanese currency has climbed 2.7 percent this year, according to Bloomberg Correlation-Weighted Indexes that record 10 developed-nation currencies. The dollar sagged down 1.2 percent, while the euro bolstered 0.3 percent.
The material has been provided by InstaForex Company – www.instaforex.com
The yen dropped down for the first time in six days versus the dollar as increases in Russian stocks and the ruble damped concern that Crimea’s vote to leave Ukraine would immediately lead to further turmoil in the region.
China’s yuan backslide to an 11-month low against the dollar after the central bank widened its exchanging band. The euro erased declines versus the dollar as the European Union and the U.S. imposed penalties on individuals in Russia amid the standoff over Ukraine. U.S. stocks bolstered as a report showed American factory production skyrocketed last month the most since August.
“There doesn’t seem to be any big escalation between Ukraine, the West, and Russia; it’s a pretty risk-on day,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc., said in a phone interview. “There was so much negativity priced in last week, it’s a relief so far. A lot of investors were expecting things would be way worse.”
The yen slumped against 15 of its 16 major counterparts, moving 0.4 percent lower to 101.77 per dollar at 5 p.m. New York time after empowering 1.9 percent last week. Japan’s currency relinquished 0.5 percent to 141.68 per euro. Europe’s 18-nation currency increased less than 0.1 percent to $1.3922 after declining 0.3 percent earlier.
The JPMorgan G7 Volatility Index shrank 13 basis points, or 0.13 percentage point, to 7.47 percent after leaping 25 basis points last week. The average this year is 7.88 percent.
Ruble Surges
Russia’s ruble rallied against all of 31 major counterparts as the Micex index of Russian stocks skyrocketed 3.7 percent after declining 7.6 percent last week. The currency empowered 0.8 percent to 42.7310 versus the central bank’s target basket of dollars and euros.
The currency “market seems to be very calm,” David Bloom, head of global currency strategy at HSBC Holdings Plc in London, said in an interview on Bloomberg Television’s “The Pulse,” with Francine Lacqua and Guy Johnson. “The market is not joining the dots and saying there’s a global problem. The market’s saying these are local isolated problems.”
The EU imposed “targeted sanctions against responsible Russians,” Danish Foreign Minister Martin Lidegaard said in a Twitter post after a meeting with his counterparts from the rest of the 28-nation bloc in Brussels. The measures include travel-visa bans and asset freezes, an EU official said. President Barack Obama ordered U.S. penalties on seven Russian government officials.
Crimean lawmakers set in motion measures for the Black Sea peninsula to leave Ukraine and join Russia after yesterday’s plebiscite, which EU and U.S. leaders have condemned as illegal. Russia has deployed about 60,000 troops along the Ukrainian border, the government in Kiev said.
‘Relief Rally’
“It’s a bit of a relief rally — some of that is the fact the situation didn’t escalate,” Brad Bechtel, managing director at Faros Trading LLC in Stamford, Connecticut, said in a telephone interview. “Right now the ball is really in the West’s court again.”
The yuan sagged down for a second day after the People’s Bank of China declared on March 15 the currency will be able to exchange as much as 2 percent on either side of a daily central bank reference rate, from 1 percent previously.
The decision underscores pledges from China’s leaders to make the exchange rate more market-based and advertise free movement of capital for investment reasons.
The onshore spot rate slide 0.5 percent lower to end at 6.1781 per dollar after dropping to 6.1818, the worst performing mark since April.
Aussie, Rand
Australia’s dollar and the Swedish krona led advances among the dollar’s 16 most-exchanged counterparts, skyrocketing 0.7 percent and 0.6 percent. Wespac Banking Corp. bring down its projection for further Australian interest-rate trims this year, bolstering the appeal of Aussie assets.
South Africa’s rand was the largest decliner, relinquishing 1 percent to 10.7751 per dollar before a report on March 19 projected to display core consumer prices rallied 5.3 percent last month from a year earlier, unmoved from January.
The dollar maintained its high note versus the yen as Federal Reserve data showed U.S. factory production increased 0.8 percent in February after a 0.9 percent decrease the prior month. An index of manufacturing in the New York region boosted to 5.61 this month, from 4.48 in February, the Fed Bank of New York reported.
The Standard & Poor’s 500 Index of stocks jumped 1 percent.
Treasury Yields
The yen backslide as yields on U.S. Treasury 10-year notes leaped, hiking the appeal of dollar-denominated assets. The yields rallied four basis points to 2.69 percent after relinquishing 13 basis points last week, the largest decline in two months. Yields on Japanese government 10-year bonds exchanged with a slight alteration at 0.62 percent.
Fed policy makers open a two-day assembly tomorrow.
The yen also slumped as Royal Bank of Scotland Group Plc said the Bank of Japan may be embarking on dovish rhetoric, helping to cap advances in the currency.
BOJ Governor Haruhiko Kuroda declared that the central bank will adjust financial policy without hesitation if it foresees a situation where reaching its inflation goal would be difficult, the Asahi newspaper reported on March 15, citing an interview. He reiterated the pledge today in parliament.
The Japanese currency has climbed 2.7 percent this year, according to Bloomberg Correlation-Weighted Indexes that record 10 developed-nation currencies. The dollar sagged down 1.2 percent, while the euro bolstered 0.3 percent.
The material has been provided by InstaForex Company – www.instaforex.com
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