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26 Jan 2015
Currency war deepens – Rabobank
FXStreet (Barcelona) - According to Rabobank, we are now deeper into the currency wars theme, with USD/JPY back under the 118 handle, and AUD and CAD trading near their last week’s lows vs the Dollar.
Key Quotes
“[..] we are ever-deeper into currency wars territory (and given that 10-year Bund yields collapsed from 0.58% to just 0.36% on Friday, it is arguably safe to say that the conjecture put forward after the introduction of ECB QE last week – that it won’t work on anything but the currency front – appears to be the market’s view too.”
“Of course, other FX crosses are also being dragged in to these wars too: AUD was at 0.79 at time of writing, having tested as low as 0.7855, while CAD is at 1.2450.”
“Risk-off appetite was meanwhile seeing JPY gain, and it was back under 118 in early Monday trading. (That will not be welcome: exports this morning were +12.9% YoY and imports were up only 1.9% as lower oil, and a weaker JPY, both did their bit to see net exports rescue a soggy domestic economy, in the traditional ‘new normal’/Japanese manner).”
Key Quotes
“[..] we are ever-deeper into currency wars territory (and given that 10-year Bund yields collapsed from 0.58% to just 0.36% on Friday, it is arguably safe to say that the conjecture put forward after the introduction of ECB QE last week – that it won’t work on anything but the currency front – appears to be the market’s view too.”
“Of course, other FX crosses are also being dragged in to these wars too: AUD was at 0.79 at time of writing, having tested as low as 0.7855, while CAD is at 1.2450.”
“Risk-off appetite was meanwhile seeing JPY gain, and it was back under 118 in early Monday trading. (That will not be welcome: exports this morning were +12.9% YoY and imports were up only 1.9% as lower oil, and a weaker JPY, both did their bit to see net exports rescue a soggy domestic economy, in the traditional ‘new normal’/Japanese manner).”