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International Financial News 20190820


· [Federal Reserve Committee, Boston Fed President Rosen Glenn: There is no need to see action now] If the global economic weakness drags down the domestic economy, it will respond.  The goal of monetary policy is not the yield curve, but inflation and unemployment.  If the economies of other countries are weak, the Fed does not need to relax the policy.  The US monetary and fiscal policies have been quite loose.  Evidence of a slowing economy is needed to justify the Fed’s policy of relaxation.

· [US President Trump: The Fed’s interest rate needs to be reduced by at least 100 basis points, and some quantitative easing measures should be considered]

Summary of investment bank views

Danske Bank: EUR/USD has remained bearish recently, and the pound is hard to bull before the Brexit deadline


Danske released a research report on Monday (August 19) saying that the euro has remained bearish against the dollar, and the pound will remain cautious ahead of the October 31 deadline.  The euro closed below the 1.11 mark last week, and we have not seen the possibility of a rebound in the currency pair.  I believe that this week's PMI data will not have much impact on the exchange rate, and the minutes of the ECB and the Fed are unlikely to help the bulls re-enter the market.

First, we believe that the current market is too aggressive for the ECB's 'stratified interest rate cuts'. Second, although the Fed may cut interest rates five times, the Fed's recent interest rate cuts are hard to exceed expectations. Only the US has cut interest rates.  In order to help the dollar weaken across the board.  The EUR/GBP has retraced from the high post since Johnson took office, but we don't think this is a significant sign of the strong pound's rise, only to wait until after the October 31 deadline.  In response to the possible “no agreement” to leave the EU, the current expectations of the pound bulls are not too high.

Mitsubishi UFJ Bank: It is expected that the euro will trade in the 1.0950-1.1250 range recently.

The euro is expected to trade in the 1.0950-1.1250 range in the near future. The Jackson Hole Global Central Bank Annual Meeting is a key event that needs to pay attention to the signs that Fed Chairman Powell may change his position; German Finance Minister Scholz said last week if the economy.  In the recession, the German government may spend an additional 50 billion euros, but said it will not take immediate action, so unless there is further clarification or headline news on this topic, it will not push up the euro in the short term.

UOB Bank: Early signs of the Australian dollar bottoming, the NZD further weakening probability remains


The UOB research team discussed the technical prospects of the Australian dollar against the US dollar and the New Zealand dollar against the US dollar.  Regarding the Australian dollar against the US dollar: The exchange rate seems to have released the initial signs of the bottom line of 0.6678. The relatively static trend of the price last Friday did not give new clues. So far, it continues to believe that the Australian dollar will try to form a short bottom, but only the long. Breaking through the 0.6845 line indicates that the Australian dollar is ready to continue to rebound, while the Australian dollar may continue to consolidate in the next few trading days.

Regarding the New Zealand dollar against the US dollar: there is still a probability that the price will fall to 0.6350. The stagnation of the price in the past few trading days has led to the loss of momentum. In other words, there is still a further decline in the exchange rate to the January 2016 low  0.6384 first-line probability, but from the perspective of soothing momentum, the current price is not high to 0.6235. On the upside, the break above the 0.65 mark means that the downward pressure is released.