Forex Analysis for Tuesday 25th April 2017
Monday: There were no Tier I announcements.
The US has stated its formal intention to impose a 20% import duty on Canadian timber and are threatening to do likewise on dairy products.
The closing of an import restriction in ultra-filtered milk from the US to Canada has caused a decline in the NZD as it is viewed that this will have a negative impact on global dairy prices.
North Korea conducts a huge live-fire drill to mark the 85th anniversary of the foundation of the Korean People’s Army. A US submarine docks in the South Korean port of Busan.
The positive perception from round 1 of the French election was the major risk factor yesterday. The USD gapped down and stayed down. This is simply a reflection of the strong EUR and its weighting in the USD index. US and global equities gapped up and stayed up. Oil hit the support line and gold dropped as the general risk sentiment turned positive. US 10 Year Treasuries rose. In FX, the EUR shot up and the sentiment was reflected in the JPY which gapped up (weakened) although it gave some of the weakness back during the day. The GBP continued to consolidate as traders hold on to their belief that an election is good for the UK’s Brexit negotiating position. CAD drops on the timber tariff issue and the threat of an extension into dairy and the NZD dropped due to the ultra-filtered milk issue.
It’s all French election and North Korea.
The calendar is light today.
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