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October 25, 2017
A negative September for emerging currencies that lost 3% against the Dollar from the peak of the ninth month of the year.
The situation fits quite well in the strengthening context of the dollar and in the rise of interest rates that characterized the month of September.
The prospect of a new increase in the cost of money in US in December could still offset the outlook for emerging currencies in November with a technical break that seems to be going on the general index Jpm FX Emerging Local Currency. The ECB meeting of October 26th could be a market mover to be monitored carefully to see which way the emerging currencies will take in the last part of 2017.
Let's now go into details with the major emerging exchange rates.
As we expected in September, the rebound of UsdMxn was quite full reaching even beyond the 200-day moving average and close to the 38.2% of retracement of the fall started in 2017. UsdMxn reaction on these resistances has been comforting with a weekly doji figure that seems to corroborate the idea that a first stop in the Mexican Pesos sales should have been fixed. UsdMxn has not yet reached the weekly overbought and this does not rule out a new attack on the resistance before a definite downtrend inversion. The feeling is that the market has sold the Pesos fearing that Trump's new tax reform will penalize the Mexican companies because of the return of capitals and investments in the US.
The rise of UsdZar resumes with the confirmation of the bullish break of the trend line that joined the decreasing tops. The South African Rand has been unable to return to the benchmark couple of moving averages. At this point, it is not unlikely to think of a UsdZar upward restart that could extend up to area 14.50. The election of the new leader of the majority party is approaching and despite the good performance of precious metals in recent weeks, the pressure on the South African currency is still high.
Strong pressures on the Turkish Lira with a heavy sell off started in September and struggling to return. Overcoming the resistance of 3.60 / 3.65 has fueled a firm upward that is partially re-entered. The problem is linked to the exchange rate that has made the most classic return move without going further. At this point, we do not rule out a short-term phase before a new upward movement that should reach the highest historic levels.
Political issues are always in the background and are still penalizing the Lira.
After the violent fall that began in 2017, UsdCny is trying to react. In area 6.70, the exchange has experimented a first stop, but now the second upward movement might come to bring UsdCny between 6.78 and 6.81, a long-term averages transit zone.
The view is still bearish and unfavourable to UsdCny with this rebound that should offer a good chance of entry behind the resistances mentioned above.
February 03, 2019
The GBPUSD pair has seen a strong rise in 2019 so far. The technical picture on the daily chart even suggests that there's more upside ahead.
May 15, 2018
This month is once again particularly eventful for the emerging world.
May 04, 2018
The dollar is the protagonist again thanks to the combined effect of 10-year US yields at 3% and a less aggressive ECB pressing on the need to normalize the monetary policy in Europe.
April 22, 2018
Bitcoin has been in a falling trend since the start of the year, but the cryptocurrency is currently attempting to break above resistance.
April 19, 2018
The month of April is proving to be full of events for emerging currencies which have suffered from the intensification of trading tensions between United States and China concerning duties, but also from the renewed political tensions between United States and Russia over the Syrian issue.
April 05, 2018
After the month of March we are now entering the month of April, in which the seasonality produces its effects.
March 22, 2018
The emerging currency market is waiting for the evident rise in rates in the United States from the Federal Reserve.
March 08, 2018
A more “hawkins” Powell than expected gave a nice boost to the US dollar with the 2-year interest rates back to 2.25%.
February 21, 2018
February has been quite a volatile month so far for the emerging currencies market together with some interesting strengthening stories (South African Rand) and others not so much (see Brazilian Real and Russian Ruble).
February 08, 2018
The month of February started with a weak Dollar against all the major world currencies, a situation that, in a slightly disordered way, Draghi first and then Trump tried to contain with the usual declaration of the need for a strong Dollar.
January 24, 2018
The month of January was quiet with some currencies that emerged against the US dollar.
December 21, 2017
December has not been volatile so far on emerging currencies as in other years when movements on exotic currencies tended to be more important.
December 07, 2017
The usual analysis of the beginning of the month starts with the main exchange rates in a very interesting month for many reasons.
November 24, 2017
The month of November is proving to be very tormented for emerging currencies, but there is much more than this.
November 07, 2017
November started with a somewhat anonymous Federal Reserve meeting that still does not dismantle the market expectations of a new rate hike in sight for the latest 2017 meeting in December.
October 13, 2017
In the month of October a lot of attention will be focused on Europe for political reasons as well as for economic reasons.
September 27, 2017
In September, the two major banks in the world have shown how the normalization of the monetary policy will continue, but at the same time will be accompanied by a long period of low rates.
September 24, 2017
When Charles Dow invented swing trading in the late 1908, he could not imagine such a great diffusion of this simple global yet very effective technique.
September 13, 2017
The ECB meeting of last Thursday officially reopened the final part of 2017 for financial markets.
September 07, 2017
September is usually a particularly interesting month for every financial market because it follows August miserable macroeconomic data and appointments with major central banks.
August 18, 2017
August is usually a volatile month for emerging currencies but it is also useful in estimating possible entry points for any tactical trade in the last part of the year.
August 03, 2017
In the month of July the Dollar has been the negative protagonist and the Euro the positive one, with other currencies more commodity-oriented and capable of earning different positions.
July 31, 2017
August is traditionally a volatile month for the currency and financial world in general and therefore the economic data that could represent a market mover must be kept under close observation.
July 05, 2017
The emerging world starts the month of July under unfavourable conditions. June has been a difficult month for some currencies, first of all the Russian Ruble and then the Brazilian Real, due to rising rates in the US, but also to the continued deterioration in oil prices.