Jan 13, 2020

It's Monday. So let's see how the world have moved in the weekends to know what forex trading strategies that we should apply today.

The unpredictable HKD

Hong Kong dollar traders will see the market go crazy when the currency has turned around in recent months. Hong Kong banks' idle cash has lessened after they raised the amount to the highest since 2002 compared to deposits. As interbank liquidity declines and demand for currencies soar, strong moves in short-term interest rates are more likely to occur. The fluctuations in interbank interest rates have been extremely severe since mid-December, causing the Hong Kong dollar to rise by nearly 0.8% within a month.

Although analysts initially blamed the sudden increase in cash demand for the season and the relaxation of short positions, the Hong Kong dollar continued to rise in January. Mr. Chun Him Cheung, a strategist at Morgan Stanley said tightening liquidity and stronger fluctuations in cash lending costs would make the Hong Kong dollar move in a "more volatile and unpredictable pattern".

A chaotic market

Asian stocks are likely to fall today after a drop in US stocks due to an unimpressive job report last Friday. The futures markets for Korean and Australian stocks both fell, while the Japanese market was closed for a holiday. The S&P 500 index has dropped from a record on Friday after the latest employment report gave mixed signals about the strength of the economy.

In the Philippines, the stock exchange will suspend trading due to the volcanic ash of Taal south of the capital. In the immediate future, the United States and China are expected to sign the first phase of the trade agreement, which President Donald Trump said will take place on Wednesday this week.

Damage from forest fires

Terrible wildfires are starting to hurt businesses in Australia. Over the past few months, Australia has witnessed numerous fires sweeping across the continent, the world's most arid place, destroying more than 2,000 houses and burning more than 10 million hectares of land, including two populous states. especially New South Wales and Victoria is the most affected. Although a clear picture of the level of economic impact will not appear after a few weeks or months after the forest fire, some businesses have now disrupted their supply chains, operations and even revenues. enter before the February reporting season.

Taiwan market going up

A landslide victory by Taiwanese President Tsai Ing-wen seems to strengthen confidence in the country's financial markets. That is the opinion of analysts and market watchers. It is expected that stocks in many sectors will be promoted in the short term as they continue to benefit from the government's supportive policies after Mr. Tsai's re-election. With the victory of the Democratic Progressive Party, traders will have a chance to react when the market is open today. The beneficiaries will likely include stocks related to biotechnology and wind power, which rose before the election on Saturday as expectations for continued support from the government.