Beijing Stimulus Hopes and Carry Trade Dictate Forex
Updated 10:27AM 11/02/2020
AUD and NOK are the top G10 FX gainers today, up 0.27% and 0.2% vs the dollar while JPY and USD are the top losers.
The dollar rose to a four-month peak as hedge funds load up on high-yielding greenback. Low volatility in the foreign exchange market has prompted investors to carry trade with the euro and the franc as the borrowing currencies and dollars as the investing currencies. Elsewhere, Emerging Asian forex caught a bid as a drop in new coronavirus cases plans of a stimulus by China improved risk appetite.
In the Asian equities space, Hang Seng closed 1.26% higher at 27583.88 and Kospi ended 1.0% at 2223.12. The European equities were trading firm with the FTSE up +0.78% at 7504.86, DAX up +0.6% at 13574.93, and CAC up +0.4% at 6039.95. In the rates market, global yields were trading firmer; the US 10-year yield was trading at 1.5851% and the Bund 10-year yield trading at -0.391%. In the energy space, the Brent (front month) is trading up (1.28%) for the day at $53.95.
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