Currencies’ Reaction to Today’s News

I know, more than you need on a quiet Sunday afternoon, but I also know that a fair number of readers look to me to keep them abreast of what I’m seeing/thinking.

I often look for the news of the day’s market impact first in currencies. Specifically, today, given the dynamics of today’s news, I’m looking at the Australian Dollar (AUD)/Japanese Yen (JPY) cross. You see, the “Aussie” offers a look into how currency traders view the prospects for the Asian (China in particular [China buys the lion’s share of the commodities Australia produces]) economy, while the Yen, ironically (and should have you thinking about how the U.S. has been approaching the outside world of late), is emerging as the world’s safe-haven currency of choice. I.e., if Asian economies are at risk (due to, say, an escalated trade war), traders might sell the Aussie and buy the Yen.

Well, as soon as quotes were available, the AUD/JPY cross was trading down well over 1% (that’s a huge move in a currency pair), however, as I type, the cross has rebounded to down a mere -.17% (still something, but a far cry from -1+%), suggesting that, for the moment, somebody sees the latest as a buying opportunity. That’s encouraging, although I wonder if it’ll stick….

As for the U.S. dollar vs the Japanese Yen (USD/JPY), it’s trading down a notable -.43% as I type.

While tomorrow’s opening is 18 hours away, the initial action in currencies suggests that we may see a bit of red as the week gets underway…


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