 After sharp volatility overnight, the forex markets relatively calm in Asian session. Australian Dollar is trading as the weakest one so far with larger than expected trade surplus providing no support. Dollar follows as the second weakest as it turned soft after the rally attempt failed. Canadian Dollar and New Zealand Dollar are also weak. On the other hand, Swiss Franc and Japanese Yen are back in control with the help of risk aversion. Yesterday's selloff in European stocks were rather serious with key levels taken out. Sentiments stabilized in US and Asia, but sentiments are rather vulnerable. One development to note was the sharp volatility in Sterling. It was firstly shot up by a Bloomberg report saying that Germany and UK made concessions on Brexit negotiation. But then the Pound was knocked down after German government spokesman cleared the air and said the position on Brexit is unchanged. Also, the spokesman said Germany has full trust in EU chief negotiator Michel Barnier. Bloomberg, and Reuters too, have been frequently used by unnamed sources to distribute false information. The motive of yesterday's news was uncertain and maybe someone wanted to undermine Barnier's position. But we have to be very careful on theses types of market moving news. Anyway, it shows once again that Sterling is very sensitive to Brexit headlines. |
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