Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Banking

Yen sinks, Aussie climbs as Evergrande contagion fears recede

2021 09 27T023433Z 1 LYNXMPEH8Q018 RTROPTP 4 JAPAN ECONOMY BOJ - Global Banking | Finance

By Kevin Buckland

TOKYO (Reuters) – The safe-haven yen sank to its lowest in nearly three months on Monday, while the risk-sensitive Australian dollar continued to recover from an almost one-month low, as fears of widespread contagion from China Evergrande Group receded.

The yen also fell as higher U.S. yields attracted Japanese investor money, while rising commodity prices helped the Aussie and Norway’s crown.

U.S. yields climbed to their highest since the start of July in anticipation of tighter U.S. monetary policy, while the dollar hovered in the middle of its range of the past week versus major peers.

The euro traded little changed at $1.1724, largely ignoring developments in German elections on the weekend, with the Social Democrats projected to narrowly defeat the CDU/CSU conservative bloc.

The Federal Reserve announced on Wednesday that it will likely begin to trim its monthly bond purchases as soon as November and flagged interest rate increases may follow sooner than expected, with half of Federal Open Market Committee members projecting a hike next year.

“USD is likely to remain caught in the cross-currents of a more hawkish FOMC and fading concerns around a potential Evergrande default,” Commonwealth Bank of Australia analysts wrote in a client note.

“Nevertheless, the risks are skewed to a firmer USD,” with any renewed Evergrande worries unlikely to trigger the level of market volatility of last week, they said.

Concerns that China’s second-largest developer Evergrande could default on its $305 billion of debt has overshadowed trade in recent weeks, but some of those contagion fears are receding.

The People’s Bank of China injected a net 100 billion yuan ($15.47 billion) into the financial system on Monday, adding to the net 320 billion yuan last week, the most since January.

Several local governments in China have set up special custodian accounts for Evergrande property projects to protect funds earmarked for housing projects from being diverted, media outlet Caixin reported on the weekend.

The yen weakened as far as 110.81 per dollar, matching a low on July 7, before trading little changed at 110.67.

The benchmark 10-year U.S. Treasury yield touched 1.466% for a second day on Monday, the highest since July 2.

“The correlation between U.S. bonds yields and USDJPY has picked up,” Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.

“USDJPY looks a little stretched, so I’d be wary to chase here, but I would be looking for a re-test of 110.50 as a potential support zone within what is a progressively bullish trend.”

The Aussie climbed 0.37% to $0.7282, up from $0.72205 a week ago, its lowest since Aug. 24.

The Norwegian crown gained about 0.4% and touched 8.5537 per dollar for the first time since July 6.

($1 = 6.4662 Chinese yuan renminbi)

(Reporting by Kevin Buckland; Editing by Ana Nicolaci da Costa)

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post