It's "normal business resumed" on the risk-on, reflation trade as nervousness dissipates about the surge in bond yields, said Robin Marshall, director of fixed income research at FTSE Russell. Investors are betting that the rollout of COVID-19 vaccines will lead to global economic recovery, boosting the outlook for commodity-linked currencies like the Canadian dollar.
USD/CAD settled below the support at 1.2700 and is trying to settle below the next support level at 1.2665.
The Canadian dollar rose by the most in nearly six weeks against the greenback on Monday as pressure on stocks due to the recent jump in bond yields faded and data showed narrowing in Canada's current account deficit. It's "normal business resumed" on the risk-on, reflation trade as nervousness dissipates about the surge in bond yields, said Robin Marshall, director of fixed income research at FTSE Russell. Investors are betting that the rollout of COVID-19 vaccines will lead to global economic recovery, boosting the outlook for commodity-linked currencies like the Canadian dollar.
The British pound initially rallied during the course of the trading session on Monday but then gave back the gains to show signs of weakness.
* Canadian dollar rises 0.6% against the greenback * Canada's current account deficit narrows to C$7.3 billion * Price of U.S. oil increases 0.9% * Canadian bond yields rise across much of the curve TORONTO, March 1 (Reuters) - The Canadian dollar rose against the greenback on Monday as pressure on stocks due to the recent jump in bond yields faded and data showed narrowing in Canada's current account deficit, with the loonie rebounding from a two-week low on Friday. World shares jumped as bond yields stayed below their recent spikes and optimism over a swift economic recovery was fueled by Johnson & Johnson's newly approved COVID-19 vaccine and progress in a new U.S. $1.9 trillion coronavirus relief package. Canada sends about 75% of its exports to the United States, including oil.
The Euro has gone back and forth during the course of the trading session on Monday, as we continue to see the 1.20 level offer a little bit of support.
The Australian dollar initially tried to rally during the trading session on Monday but gave back the early gains to sit on top of the 50 day EMA.
Litecoin is currently trading at $172 following a 11.36% recovery over the course of Sunday’s trading session.
The direction of the March U.S. Dollar index on Monday is likely to be determined by trader reaction to the 50% level at 90.950.
The direction of the AUD/USD on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .7733.
AUD/USD is testing the resistance level at 0.7760.
EUR/USD is testing the resistance level at 1.2080.
GBP/USD gained upside momentum and is trying to get above the resistance at 1.3980.
European stock markets surged Monday, boosted by healthy manufacturing data in the region, a semblance of calm in global bond markets and more positive news of Covid-19 vaccines. European PMI data came in ahead of expectations, climbing to 57.9 in February from 54.8 last month, with the dominant German manufacturing sector expanding at an impressive rate. Government bond yields have stabilized at the start of the week after last week’s sharp gains, lessening the pressure on stock markets as rising yields made equities look less attractive to investors.
The dollar index rose to a three-week high on Monday as investors bet on faster growth and inflation in the United States, while the Australian dollar gained after Australia's central bank bought more bonds than expected in a bid to stem rapidly rising yields. Benchmark 10-year Treasury yields rose to 1.432% on Monday, but are holding below the one-year high of 1.614% reached on Thursday. The dollar is benefiting "on the yield differential, on the growth expectation differentials," compared with other countries, said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E TOKYO, March 1 (Reuters) - The Australian dollar and other riskier currencies recovered some lost ground against the U.S. dollar on Monday, after suffering their biggest plunges in a year at the end of last week amid a hefty sell-off in global bond markets. Currency markets have taken cues from the global bond market, where yields have surged in anticipation of an accelerated economic recovery. "USD direction is likely to hinge on not only the direction, but also the pace, of global bond moves," Commonwealth Bank of Australia strategists wrote in a research note.
By Gina Lee
Overall currency markets are confronted by a crucial yet extremely cautious week ahead. Price ranges this week are running at the widest points in many months and adds to the potential of big moves.
The BOJ didn’t act on Friday, but its benchmark yield surged to within a couple of basis points of the perceived limit of the central bank.
Fears of reinflation sparked demand for the safety of the Greenback in the week, leaving commodity currencies and the equity markets in the red.
The following is a contributed article from a content partner of Benzinga The United States Dollar has been devaluing against other ...
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Note: For the figures included in their FFSS, the Company has accounted for the effects of inflation adjustment adopted by Resolution 777/18 of the Comisión Nacional de Valores ("CNV"), which establishes that the restatement will be applied to the annual financial statements, for intermediate and special periods ended as of December 31, 2018 inclusive. Accordingly, the reported figures corresponding to 9M20 include the effects of the adoption of inflationary accounting in accordance with IAS 29. Finally, comments related to variations of results of 9M20 and vs. 9M19 mentioned in this press release correspond to "figures restated by inflation" or "constant".
The dollar had been trading heavily, but it seemed as we entered the last week of Oct. that it was unreasonable to look for a downside breakout given the new acute contagion in Europe and what by all accounts would be a dovish ECB press conference.
The US elections are next week, expect a significant uptick in volatility. The markets hate uncertainty, so a close or disputed election could send stocks reeling. I see a generational buying opportunity in energy-related assets.