Currency Forwards and Option Hedging Strategies Rise with Soaring US Dollar

The US dollar has risen about 15% against a basket of currencies over the last year with rising U.S. interest rates and safe haven flows. The higher greenback has reduced the profits of U.S. multinational companies that convert foreign currency into dollars, multinationals such as Coca-Cola Co, Procter & Gamble and Philip Morris International are just some seeing an impact. The US dollar is at a two-decade high against the Japanese yen, up 13% this year. Against the Euro is … Continue reading “Currency Forwards and Option Hedging Strategies Rise with Soaring US Dollar”

Japanese Yen Weakest Major Currency Against US Dollar in 2022

Rising U.S. interest rates and safe haven flows have seen the U.S. dollar soar in 2022. The American 10-yr yield rose six basis points to 3.12%, hitting a fresh high for the year while the 2-yr yield fell five basis points to 2.67%. The US Dollar Index (DXY) hit a 20-year high, the highest levels since 2002. The weakest component of the index has been the Japanese yen, sliding around 12 per cent against the dollar and underperforming even weak … Continue reading “Japanese Yen Weakest Major Currency Against US Dollar in 2022”

RBA Raises Rates From Record Low 0.10% by 25 bps to 0.35%

The Reserve Bank of Australia raised interest rates off an all-time low on Tuesday to 0.35% higher than the widely expected 15 bps after the April monthly statement no longer featured the phrase “the board is prepared to be patient”. This indicated the rate cycle has accelerated. This is the first-rate hike by the RBA since 2010. The Australian dollar popped 0.7090 to 0.7140 on the decision, while the ASX 200 dropped on the announcement. RBA patience coming to an … Continue reading “RBA Raises Rates From Record Low 0.10% by 25 bps to 0.35%”

US Dollar Hits 20 Year High in April on High Rates and Safe Haven Flows

The U.S. dollar has soared with safe haven flows as geopolitical fears grip the world and interest-rate increases from the Federal Reserve. US Dollar Index (DXY) hit a 20-year high, the highest levels since 2002. The Greenback reached multiyear highs against the euro, the British pound and the yen in April with the positive rate differentials, a huge part of the dollar’s strength. A strengthening dollar also tends to weigh heavily on emerging markets currencies, a rising dollar makes dollar-denominated … Continue reading “US Dollar Hits 20 Year High in April on High Rates and Safe Haven Flows”

RBA Patience Running Out with Inflation, Keeps Rates at Record Low 0.10% Ahead of Election

The Reserve Bank of Australia held interest rates at an all-time low on Tuesday to just 0.1% as widely expected. However, a rate rise may become sooner rather than later, the April monthly statement no longer features the phrase “the board is prepared to be patient”, which many see as an indicator the rate cycle has accelerated. The Australian dollar popped above 76 US cents, while the ASX 200 dropped sharply on the announcement. RBA patience coming to an end … Continue reading “RBA Patience Running Out with Inflation, Keeps Rates at Record Low 0.10% Ahead of Election”

RBA Keep Rates at Record Low 0.10% and Ends QE as Expected

The Reserve Bank of Australia held interest rates at an all-time low on Tuesday to just 0.1% as widely expected. The RBA is ending QE with final purchases to take place on Feb 10. The prior pace of QE was A$4 billion/week. The bank said while inflation has picked up, it is too early to conclude that it is sustainably within the target band. RBA printing coming to an end Highlights Cash rate cut maintained at 0.1% To end QE … Continue reading “RBA Keep Rates at Record Low 0.10% and Ends QE as Expected”

Australian Coking Coal Record High with Strong Demand in Korea and Japan

Record prices for top quality Australian hard coking coal were set three times in the past week. The price hit $US430 ($595) a tonne Wednesday, almost four times the price in May. Coal prices have risen unabated with supply chain disruptions. Strong demand in Korea and Japan has fueled the rally over the past seven weeks. The prices were already pressured with Indonesia’s decision to ban coal exports. Further pressure on coal prices came from BHP, the world’s biggest coking … Continue reading “Australian Coking Coal Record High with Strong Demand in Korea and Japan”

The Australian ASX 200 Stock Market Closed Up 13% in 2021 With Lithium Plays Starring

Australian Blue Chip ASX 200 ended the ASX finished 2021 at 7,779.20 up over 13% for the year. This compares to a loss of just over 1% in 2020 and a gain of over 20% in 2019. All of the 11 main sectors of the share market were higher except information technology and energy in 2021. Tech went from being the best-performing sector in 2020 to the worst in 2021. Battery materials supplier Novonix was the top stock up 660 … Continue reading “The Australian ASX 200 Stock Market Closed Up 13% in 2021 With Lithium Plays Starring”

Reserve Bank Of New Zealand TWI Re-Weighting Sees Chinese Yuan Higher and Australian Dollar Lower

The RBNZ released it’s annual re-weighting of the Trade-Weighted Index (TWI) Thursday to take effect on Friday 10 December 2021. The Chinese yuan weighting rose from 0.2348 to 0.2704. Australian dollar weighting fell from 0.1871 to 0.1729. The TWI is a measure of the value of the New Zealand dollar relative to the currencies of New Zealand’s major trading partners. There are 17 currencies included in the TWI and each currency is weighted using the country’s two-way goods and services … Continue reading “Reserve Bank Of New Zealand TWI Re-Weighting Sees Chinese Yuan Higher and Australian Dollar Lower”

RBA Keep Rates At Record Low 0.10% With Household Consumption Rebounding Strongly

The Reserve Bank of Australia held interest rates at an all-time low on Tuesday to just 0.1% as widely expected. The RBA said the economy is expected to return to pre-Delta path in H1 2022. Leading indicators point to a strong recovery in labor market. RBA Cutting & Printing Highlights Cash rate cut maintained at 0.1% Omicron variant is new source of uncertainty Household consumption is rebounding strongly The outlook for business investment has improved Economy expected to return to … Continue reading “RBA Keep Rates At Record Low 0.10% With Household Consumption Rebounding Strongly”