AAEAAQAAAAAAAAWVAAAAJDlmMGFmYTUxLThlNTMtNDY3OS1iMTY2LTUyN2E0ZmNiY2ZhMQ

Protect your International Currency Transfer from Events like ‘Black Monday’ with Risk Management Strategies

Just as financial markets began to recover from months of ‘Grexit’ fears and investors started focusing on rate hike speculation again, there was another asset-shaking shift in the form of ‘Black Monday’.

The state of China’s economy and the slowing pace of growth in the nation has been a growing cause of concern, but a six-year low Manufacturing PMI proved the catalyst for a dramatic tumble in Chinese stocks. The over 8% slide in the Shanghai Stock Exchange triggered losses in European and US stock markets so extensive that traders were reminded forcibly of the early stages of the global financial crisis.
Continue reading


Heavy selling in financial markets saw the AUDUSD fall more than 2% overnight as global financial markets experienced heavy selling.

The steep losses in Chinese markets yesterday were the main driver of the Aussie’s fall as equity markets around the globe collapsed.

The largest losses were against the lowest-yielding currencies like the euro and Japanese yen. The AUDEUR fell 4.0% yesterday while the AUDJPY fell an incredible 8.3%.

What’s next?

In the near term, a continuation of the panic selling could easily see the AUDUSD trade below 0.7000.

Over the medium term, however, the Aussie could drift back higher – especially if the US Federal Reserve decides the global panic warrants a delay to any US interest rate increase.


Two charts that show the woe for emerging market currencies despite a pause in the devaluation of the renminbi, the cause of turmoil across global currencies.

The implications — among them a more troubled Chinese economy than previously thought, deflationary strains in western countries and falling equity stocks — are being felt mostly by China’s regional trading neighbours and other emerging markets.


EUR/USD
xtended its previous week’s gains last week as the world economic situation — which began with China’s Yuan devaluation and subsequent stock market crash — and the FOMC Meeting Minutes further reduced the possibility of a September rate hike by the Fed. The rate began the week on a soft note, declining on Monday despite the U.S. Empire State Manufacturing Index, which declined -14.9, significantly worse than the expected increase of +5.0 that was expected. The pair made its weekly low of 1.1016 on Tuesday after unofficial reports that the Greek government was to announce a confidence vote, which could raise uncertainty on the bailout deal with international creditors.
Continue reading


FX markets remain skittish a few hours after New York traders walked in. Oil prices are trading heavy, US stock futures are soft and there aren’t any US data releases to put a bridge over troubled waters. That should keep USDCAD pointing higher for the balance of the day. So much for a sleepy Monday morning.

It was a panic driven overnight market. USDCAD smashed through resistance in the 1.3200-10 area and continued to climb, finally running out of gas at 1.3270. The Shanghai Composite Index plunged 8.5%, sparking a risk-aversion stampede which boosted EUR and JPY while crushing commodity bloc currencies.
Continue reading


EUR/USD
Gained ground last week as the Greenback and commodity currencies were negatively affected by the Chinese Yuan devaluation, while the Euro and Sterling ended the week as the strongest major currencies. The week began with the rate rallying after making its weekly low of 1.0925 on Monday after comments from the Fed’s Stanley Fischer, saying that, “Employment has been rising pretty fast relative to previous performance, and yet inflation is very low, and the concern about this situation is not to move before we see inflation, as well as employment, returning to more normal levels.”
Continue reading


China’s central bank has raised the value of the yuan against the US dollar by 0.05%, ending three days of falls in a surprise series of devaluations.

The daily reference rate was set at 6.3975 yuan to $1.0, from 6.4010 the previous day, the China Foreign Exchange Trade System said. That was also slightly stronger than Thursday’s close of 6.3982 yuan.

The higher fixing for the yuan came after the People’s Bank of China (PBoC) sought to reassure financial markets by pledging to seek a stable currency after a shock devaluation of nearly 2% on Tuesday.

The cut, and two subsequent reductions, rattled global financial markets – raising questions over the health of the world’s second-largest economy and sparking fears of a possible currency war.

Beijing said the move was the result of switching to a more market-oriented method of calculating the daily reference rate which sets the value of the yuan, also known as the renminbi (RMB).

Previously authorities based the rate on a poll of market-makers, but will now also take into account the previous day’s close, foreign exchange supply and demand and the rates of major currencies.

The yuan is still only allowed to fluctuate up or down 2% on either side of the reference rate.

“Currently there is no basis for the renminbi exchange rate to continue to depreciate,” PBoC assistant governor Zhang Xiaohui said on Thursday.

“The central bank has the ability to keep the renminbi basically stable at a reasonable and balanced level,” she said.

Speaking earlier this week another PBoC official said the central bank could directly intervene in the market, after reports it bought yuan on Wednesday to prop up the unit.

“The central bank, if necessary, is fully capable of stabilising the exchange rate through direct intervention in the foreign exchange market,” PBoC economist Ma Jun said.

China keeps a tight grip on its currency on worries sudden fund outflows or inflows could cause more financial risk and challenge its control, but it has also pledged to move towards more flexibility.

Beijing is pushing for the yuan to become one of the reserve currencies in the International Monetary Fund’s special drawing rights (SDR) group.

Source: Guardian


China surprised markets and devalued the yuan by 2%, the first devaluation in 20 years. Asia FX traders bought dollars across the board but those moves started to retrace in Europe, except for the Commodity bloc). As of 6:15 am PDT, Aussie was the biggest loser (down 1.2%) followed by kiwi (0.75%) and then the Canadian dollar.(0.60%)

The move, coming as economic growth has flagged and the currency has been under upward pressure from its informal peg to the rising dollar, is in sharp contrast to policy during earlier times of stress when Beijing resisted pressure to devalue. It should help combat an unexpectedly large fall in China’s exports fuelled by the renminbi’s relative strength.
Continue reading


EUR/USD
Declined fractionally last week as the United States reported a slightly lower than expected Non-Farm Payrolls number with both economies reporting mixed economic data. The rate began the week on a soft note, declining from its weekly high of 1.0995 on Monday after Spanish Manufacturing PMI printed at 53.6 versus 54.2 expected, while U.S. ISM Manufacturing PMI printed at 52.7 compared to an expected reading of 53.6. The pair continued lower on Tuesday despite Spanish Unemployment Change, which declined -74.0K compared to an expected -45.6K. U.S. data included an increase in Factory Orders of +1.8% m/m, which was widely anticipated. On Wednesday, the rate consolidated at a slightly higher level after U.S. ADP Non-Farm Employment Change increased +185K compared to an expected +216K, also, the U.S. Trade Balance showed a deficit of -43.8B versus an expected -42.8B and ISM Non-Manufacturing PMI, which printed at 60.3 versus 56.3 anticipated.
Continue reading


USDCAD Range 1.3115-1.3210

USDCAD touched 1.3210 in Asia, hovered around 1.3200 throughout the European session and collapsed in early New York trading on a combination of soft ADP employment data and a surprisingly strong Canadian Merchandise Trade report. June exports soared 7.1% and the trade deficit declined to a mere $500 million from the May deficit of $3.34 billion.

There is no doubt that the Canadian data is strong which suggests that maybe the expected recovery in the 2nd half isn’t a fantasy but a real possibility. Having said that, USDCAD isn’t trading like anyone actually believes that a Canadian recovery is close. The drop from 1.3180 to 1.3115 was more a factor of weak long dollar positions getting squeezed than anything else.

The Asian session saw a continuation of the New York afternoon US dollar strength due to The Wall Street Journal’s story that Atlanta Fed President, Lockhart, a doveish, but non-voting member of the FOMC turned hawkish and championed a rate hike in September.

The European session was quieter. Perhaps those traders weren’t nearly impressed with Lockhart’s comments as everyone else. He has said similar things before and there are still two NFP reports ahead of the September FOMC.

Today’s softer than expected ADP data may temper bullish NFP calls and lead to a bit of US dollar profit taking. If so, USDCAD will likely consolidate within a 1.3050-1.3200 range.

Technical Outlook

The intraday technicals are bearish following the retreat from 1.3210 and the subsequent break of minor support at 1.3150. A break below 1.3100-10 would lead to a test of 1.3050. Meanwhile, the short term uptrend is still intact while trading above 1.3000. For today, USDCAD support is at 1.3110, 1.3080 and 1.3050. Resistance is at 1.3160 and 1.3210

Today’s Range 1.3080-1.3160

The above views expressed in this market commentary are only views and not investment advice.This is for informational purposes only and we make no representations as to the accuracy or completeness and will not be liable for any errors or omissions. Agility Forex Ltd is registered (M13773887) with FINTRAC , Canada and headquartered in Vancouver British Columbia, Canada.

EUR/USD
Ended the week up a fraction after expectations of a Fed rate hike in September faded and both economies reported mixed economic numbers. The week began on a strong note, with the rate making its weekly high of 1.1128 on Monday after German Ifo Business Climate printed at 108.0 compared to an expected reading of 107.6. Also out on Monday were U.S. Durable Goods Orders, which increased +3.4% m/m versus +3.2% anticipated, while Core Durable Goods increased +0.8% m/m versus +0.4% expected. The pair then declined on Tuesday after comments from ECB Executive Board member Benoit Coere in a press interview, where he said that, “In truth, the question is not whether to restructure Greece’s debt but rather how to do it so that it would be really useful for the country’s economy,” adding, “that’s why it’s important to make this restructuring, whatever form it takes, conditional on the application of measures that reinforce the economy and ensure the sustainability of Greek public finances”.

Continue reading


EUR/USD
Reversed direction, trading higher last week after the Greek Parliament voted in favour of a second package of prerequisites to obtain further financial assistance, while both economies reported mixed economic data. The week began with the rate consolidating after making its weekly low of 1.0808 on Monday after Greece begun repayment of €6.35B to the ECB and IMF. Greeks were allowed to withdraw up to €420.00 from banks per week instead of €60.00 per day.
Continue reading


Overnight Range 1.3020-1.3103

USDCAD took off like a viral video when early New York/Toronto traders found their desks. One look at the overnight FX markets was enough for traders to pull the Loonie from the sidelines and put it in the game. USDCAD grabbed the ball and took off, streaking down field, touching 1.3103 from a 1.3033 start. It has since retreated but if the 1.3040-50 area holds, 1.3350 will soon be trading.

A big part of the story is China. The move started in Asia with the release of worse-than-expected Caixin (formerly HSBC) Manufacturing PMI which dropped to 48.2 in July, down from 49.4 in June and well below the 49.7 that had been forecast. That news sparked chatter of a PBoC rate cut. Shortly after, headlines came out stating that “China to expand CNY trading band”. Fears of a worsening Chinese slowdown gave the US dollar a bit of a bid and commodity markets got nervous.
Continue reading


EUR/USD
Traded sharply lower last week as the Greek government and creditors arrived at an agreement, the ECB left rates unchanged and Fed Chair Janet Yellen testified before the House Committee on Financial Services. The week began with the rate dropping sharply on Monday after making its weekly high of 1.1196 after an agreement was arrived at between Greece and creditors at the Euro Summit. Donald Tusk, President of the European Council said, “One can say that we have ‘agreekment’. Leaders have agreed in principle that they are ready to start negotiations on an ESM programme, which in other words means continued support for Greece. There are strict conditions to be met. The approval of several national parliaments, including the Greek parliament, is now needed for negotiations on an ESM programme to formally begin.
Continue reading


USDCAD Overnight Range 1.2307-1.2377

USDCAD popped higher in early New York trading when traders returning from their long weekend took note of WTI prices pushing through the 38.2% Fibonacci level of the March-June range ($54.44) and trading at $54.22.Wti has since bounced back to $54.60/bbl but the Loonie has ignored the move. Last week’s reports of rising crude inventories combined with the looming possibility of the end of sanctions on Iran increasing oil supplies and renewed economic growth concerns for China, has put downward pressure on oil and the Canadian dollar.
Continue reading


EUR/USD
Reversed direction, trading lower last week as the Greek debt negotiations continue without resolution and despite mostly positive numbers out of the Eurozone. The United States reported mixed data overall last week. The week began with the pair declining after making its weekly high of 1.1409 on Monday after Donald Tusk, President of the European Council stated at the Eurogroup meetings that, “I can say that since I called this informal meeting, some promising things have happened, including today’s talks and meeting. But the most important thing is that the leaders take full responsibility for the political process to avoid the worst case scenario, which means uncontrollable, chaotic Graccident.” Continue reading


USDCAD Overnight Range 1.2307-1.2377

The Greek PM cries referendum, the Eurozone Finance ministers cry no extension and Greek citizens just cry. News that the Greek government implemented capital controls and shuttered banks until July 7th spooked FX markets in early Asian trading. A bout of risk aversion in a thin market saw EURUSD plunge to 1.0955 from Friday’s close at 1.1170. USDJPY also gapped lower, dropping to 122.20 from 123.80. EURUSD recovered almost all of its losses in Europe while USDJPY has not.

Lost in the tossed salad that was Greek, was news of a 0.25 bp rate cut in China. The one year benchmark deposit rate is now 2.00% while the lending rate fell to 4.85%.
Continue reading


EUR/USD
Extended its gains last week despite the Greek drama entering its final phase and as the FOMC released a Statement that was perceived as dovish. The week began with the rate gaining after making its weekly low of 1.1188 on Monday after debt negotiations with Greece collapsed after only 45 minutes on Sunday. German Bundesbank President Weidmann said that if Greece failed to make payments it “would have consequences for Greece that are difficult to control.” For his part, ECB President Draghi said that, “The situation in Greece reminds us again that the Economic and Monetary Union is an unfinished construction as long as we do not have all tools in place to ensure that all euro area members are economically, fiscally and financially sufficiently resilient. To complete the Economic and Monetary Union, we need a quantum leap towards a stronger, more efficient institutional architecture.” The pair then lost ground on Tuesday after German ZEW Economic Sentiment printed at 31.5 compared to 37.5 expected, while EZ ZEW Economic Sentiment showed a reading of 53.7 versus 60.3 anticipated.
Continue reading


EUR/USD
Extended its gains last week as the European Commission upwardly revised EZ economic forecasts and optimism over the situation in Greece supported the rate with both countries reporting mixed economic data. The week began with the pair consolidating on Monday after Spanish Manufacturing PMI printed at 54.2 versus 54.6 expected, while German Final Manufacturing PMI printed at 52.1, in line with expectations. The rate then lost ground on Tuesday despite an upward revision from the European Commission on EZ GDP growth. The agency revised GDP growth for 2015 from +1.3% to +1.5%. Continue reading


USDCAD Overnight Range 1.2048-1.2142

The highly anticipated US (and Canadian) employment reports were greeted with a resounding “meh”. NFP was right on consensus and the unemployment rate is 5.4%. EURUSD rose and fell and is currently back to its pre-release level. The Canadian report was worse than expected, which was actually expected, shedding 19,700 jobs. The details revealed that the data isn’t as bad as it looks with full-time gaining 46,900 jobs. All the losses were part-time. USDCAD trading was erratic but has settled close to where it was before the news.
Continue reading


EUR/USD
Continued its rally last week as both economies reported mixed economic numbers. The rate was supported by a neutral FOMC Statement and confidence that Greece was nearing an agreement with creditors. The week began with the pair making its weekly low of 1.0818 on Monday in the absence of any significant data out of either economy. The pair extended its gains on Tuesday after Greek Prime Minister Alexis Tsirpas expressed confidence that Greece would reach an outline deal with creditors before EZ finance ministers meet on May 11th, one day before a repayment of €700 million is due to the IMF. Also, U.S. CB Consumer Climate came out with a reading of 95.2 versus 102.6 expected. Continue reading


EUR/USD
Extended its previous week’s gains last week as asset flows favoured the Euro over the Greenback and despite continued concerns over Greece. The rate gained with mostly lower than expected economic data out of both economies. The week began on a soft note, with the rate declining on Monday in the absence of any significant economic data from either the Eurozone or the United States, and after ECB President Draghi said that, “growth projections, as well as inflation expectations – reflected both by outside observers and by ECB staff projections -have been revised upwards. And confidence overall has increased.” Continue reading



USDCAD Overnight Range 1.2223-1.2323

The US dollar is Mr. Toad and it has been on a wild ride this morning. Another bout of weak US economic data (Jobless Claims rose, Housing Starts and Building Permits fell) revered hard won US dollar gains in Europe. USDCAD which had scraped back above 1.2310 prior to the data plunged and is now 1.2228, below the overnight low. The break of major support at 1.2330 combined with a re-evaluation of the Canadian economic landscape and the prospect of higher oil prices have triggered a wholesale bail-out of stale Long USDCAD positions.

The overnight session was entertaining. AUDUSD took over where Canada left off in a lively Asian session. Short AUDUSD traders scrambled to cover positions when Australia announced a whopping 37,700 jobs increase and a drop in the unemployment rate to 6.1% from 6.3% and AUDUSD soared. Kiwi followed AUDUSD higher. USDJPY traders saw the carnage in AUDUSD and USDCAD and sold dollars as well. In Europe, EURUSD traders bought dollars and then reversed course just ahead of the New York opening. The US dollar has been offered ever since.
Continue reading


EUR/USD Reversed direction, trading sharply lower last week as continued uncertainties for Greece and a possible Fed rate hike in June pressured the rate. The week began with the pair declining after making its weekly high of 1.1035 on Monday despite Spanish Unemployment Change showing a drop of -60.2K, significantly higher than the anticipated -18.3K, while U.S. ISM Non-Manufacturing PMI came out in line with expectations at 56.5. The rate continued its decline on Tuesday despite Spanish Services PMI printing at 57.3 versus 56.6 expected and German Final Services PMI, which printed at 55.4, in line with expectations.
Continue reading