Covid variant has markets seeing red Asian stock markets are under heavy selling pressure this morning with investors spooked by the emergence of a heavily mutated variant of Covid-19 in South Africa, lovingly called B.1.1.529. The UK has paused flights from South Africa and five other neighbouring countries, and we can expect more of the same elsewhere, the complacency seen with the emergence of delta in India being a lesson harshly learned. Two cases with the new variant have already been detected in Hong Kong today. Headlines are also floating around this morning about tightening virus restrictions in parts of China. With US markets closed for holidays, investors are voting with their feet this morning. The one bull in the China shop that could truly derail the … [Read More...]

The euro has reversed directions on Friday and has posted considerable gains. EUR/USD is trading at 1.1289 in Europe, up 0.75%. The euro is benefitting from fears of a Covid variant that has spread across South Africa and is was detected in Hong Kong today. Despite today’s positive performance, the technical outlook for the euro remains bearish. It has been a rough November for the euro, which is down 2.44% this month. Europe is in the midst of a fourth wave of Covid, and the massive spike in cases in Germany and elsewhere could derail the EU’s tenuous recovery. Things were looking rosy until now, with the EU forecasting a strong 5% growth rate for 2021, but that projection is in jeopardy as lockdowns are looking … [Read More...]

New Zealand dollar hits 1-month low The New Zealand dollar has dropped considerably in the Tuesday session. NZD/USD is currently trading at 0.6995, down 0.72% on the day. The currency fell below the symbolic 70-level for the first time since mid-October. New Zealand will release Inflation Expectations on Thursday. The indicator has been accelerating and rose to 2.27% in the second quarter. The RBNZ will be paying close attention, as inflation expectations can manifest into actual inflation, and inflation levels will be an important consideration for the RBNZ in deciding whether to raise rates for a second straight month at next week’s policy meeting. In October, annual inflation for Q3 jumped to 4.9%, up from 3.3% and above the consensus of 4.2%. The central bank … [Read More...]

The British pound is down considerably on Wednesday. GBP/USD is currently trading at 1.3472, down 0.63% on the day. Markets await GDP Thursday brings a data dump out of the UK, and the results could play a factor as to whether or not the Bank of England decides to raise rates at the December policy meeting. Market participants are still scratching their heads after the BoE kept rates at 0.10% at last week’s meeting. Governor Andrew Bailey has been sending out strong hints about raising rates, but when crunch time came, not only did the BoE balk, but Bailey voted with the 7-2 majority against a rate hike. The key release on Thursday will be the GDP report for Q3. A strong reading will reinforce the outlook … [Read More...]