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AUD

Market Briefing: Dollar Keeps Rising. We Don’t Know Why.

The dollar is climbing for a second day, but coherent explanations for the move are in short supply. One could argue that investors are clinging to safe havens as the prospect of a slowdown in the world’s second-largest economy darkens the outlook, but China’s peculiar growth model means it subtracts net demand from the rest of the world, and commodity-linked and growth-sensitive currencies appear to be holding ground so far. Europe is relatively quiet. The pound exhibited no discernible reaction earlier this morning on signs of cooling in the British labour market, and the euro remains under pressure on news...

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Market Briefing: Dollar Climbs on Big Trouble in Even Bigger China

Evidence of a deep and prolonged slowdown in the Chinese economy is taking a toll on global risk sentiment this morning, with safe haven demand sending the dollar higher amid parched liquidity conditions. Raw materials prices are falling, commodity-linked currencies are on the defensive, and North American equity indices are setting up for a weaker open. Treasury yields are essentially flat as some investors cling to bets on a “soft landing” — in which inflation decelerates but a deep recession is avoided — in the US economy. Consumer sentiment improved by more than expected in early August. According to estimates...

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Market Briefing: Tensions in Taiwan Strait Trigger Market Turmoil

A worsening in relations between the US and China is driving an exodus from risk-sensitive assets this morning. Military forces on both sides of the Strait are on high alert as House Speaker Nancy Pelosi – the third highest-ranking official in the US government – is expected to visit Taiwan in a few hours, defying increasingly-strident Chinese threats. The Swiss franc and dollar are well-bid, and long-term debt instruments are in high demand as investors buy insurance against a mishap and raise odds on further escalation in the “war by other means” between China and the United States. Japan’s yen...

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