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March 22, 2018
The emerging currency market is waiting for the evident rise in rates in the United States from the Federal Reserve.
The reaction will not be so much due to the formal decision (which is already incorporated in prices), but rather to the prospect of further rises that Powell will provide the market.
What we are seeing in recent months is a split of the emerging world. A good trend for the Asian currencies as the South Korean Won, the Taiwan Dollar and the Chinese Renmimbi, while not so good for the Turkish Lira, the Polish Zloty and the South African Rand. Geopolitical events such as the return of tensions between the United States and Iran, between Great Britain and Russia, but also the threats on duties carried on by President Trump, are still ballast for the emerging world currencies. Let's now look at the analysis of the main ones in detail.
Turkish Lira in trouble with UsdTry that is heading again towards the double top of area 3.95. The exchange rate has not even gone close to the 200-day moving average, but it has formalized a bullish head and shoulder that has closed the corrective phase. Now the target is precisely the area of the double top and given that the RSI has just entered the overbought zone, the pressure on the Lira does not seem to be destined to run out shortly.
The threat of new sanctions from the United States and now even Great Britain towards Russia has brought some weakness to the Russian Ruble. The cyberattacks and the story of the poisoning of the Russian spy in Britain, have turned the tensions with the Western world back on. UsdRub once again touched the 55.75 support that has been preventing the war against the dollar for a year. At this point it is possible to come back to area 60, the upper wall of the trading range.
The Mexican peso is in a rally: March is a traditionally positive month the Central American currency. In the last 20 years, UsdMxn has dropped 16 times, an important seasonality that has been respected. UsdMxn, however, has stopped its run near the first short-term support in area 18.50. The 200-day moving average and the trend line started in July 2017 represent the obstacles to a return of strength of the Peso that, in case of a downward break, would reach up to 17.50.
The Chinese Renminbi is still appreciated by international investors as it is still close to the highest level since 2015. Since the beginning of 2017 Cny has earned almost 10% against the US dollar, an insufficient devaluation to reverse the trend in the American trade deficit and probably the result of greater diversification of the Chinese foreign exchange reserves as anticipated long ago by Beijing. Our view is that of a stagnation phase around 6.30 needed to metabolize the fall in recent months. The Fed monetary policy will be very important defining a new directionality in the coming months, also because the choices on the rates of Washington are often replicated by Beijing.
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 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 25, 2017
A negative September for emerging currencies that lost 3% against the Dollar from the peak of the ninth month of the year.
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.