We saw relatively steady market conditions during Friday’s trading sessions with the equity markets finishing the week just in the positive and the dollar index consolidating around 92.50. The same themes remain relevant in the market at the moment with various geopolitical factors still front of mind for most investors. The US yield curve is also causing some consternation for traders as the possibility of an inversion occurring later this year could point to a forthcoming recession for the US economy.
We saw the dollar drop back off of recent highs to the end of last weeks trading and it’s dropped nicely back into the range against most of the major currencies, investors will be looking to see if this gives us better levels to buy dollars or if we’re going to see a continuation of this reversal. We’ve got some key events coming up this week which could give us some good direction for the greenback as well as the other majors including the Retail Sales and Industrial Production number out of the US, jobs numbers in Australia, Earnings data in the UK and the Canadian CPI and Retail Sales.
The focus today in Asia will be on the market opens in both Australia and Japan, but there will be increased attention on Malaysia as the equities markets open there for the first time since their historic election results – we expect to see further pressure on the MYR until the market gets greater transparency and certainty from the incoming administration. It’s very quiet through the trading sessions today with a dearth of economic fundamental data being released and so focus will continue to remain on the news wires and any progress on those geopolitical and trade issues that having been influencing flows recently.