 Global stock markets were some what supported by talks of staged exit of coronavirus lockdown. There was optimism that finally a cure for the virus too. Nevertheless, the extended rebound in stocks were not much reflected in the currency markets. Yen ended the week as the strongest one, followed by Sterling. New Zealand Dollar was the weakest, followed by Euro. Dollar was just mixed. It should be reminded that the crash in March was driven by both the coronavirus pandemic and oil price war. It's clear that traders didn't buy into that OPEC++ deal on production cut as we saw WTI crude oil future dropped through 20 handle. It could be hard for stock markets to extend recent rally if there is no sustainable rebound in oil prices. If risk aversion does come back, as we argued below, we'd favor selling Kiwi. On the other hand, oil driven risk rally would favor Canadian Dollar over other commodity currencies. |
No comments:
Post a Comment