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Currencies stabilise as stock markets recover

7 Aug 2024

A comment from the Bank of Japan's deputy governor Uchida that the central bank would not raise rates while markets were in turmoil has led to a recovery in global stock markets and seen some calm returns to currency markets.

Source: Reuters.

The Nikkei is up around 3.0% this morning, the Hang Seng and the Shanghai are positive, while US futures are in the green. The dollar is a touch softer than the euro and the pound at 1.0932 and 1.2706, respectively, but the yen is 2.3% weaker at 147.80. The rand, which had closed at R18.49 last night, is currently trading firmer at R18.37 as risk sentiment improves and EM currencies all show some gains.

China's trade data once again disappointed as imports improved slightly, but exports missed expectations badly. Tomorrow's US jobless claims number will now be sharply in focus for confirmation of the weakening US labour market.

Gold firmer, oil pressured

Gold is trading marginally firmer at $2,394 after having retreated yesterday as risk appetite improved and equity markets recovered. Platinum and Palladium are both up around 1.0% this morning, but Brent crude remains on the back foot at $76.80.

Demand concerns remain the primary driver for the weaker oil prices.

About Andre Cilliers

Andre is the Currency Risk Strategist at TreasuryONE. Andre's career in treasury spans more than 30 years. He has gained his extensive currency risk experience in both the banking and corporate arena. Before joining TreasuryONE, Andre headed up the treasury department for a Tier One German international bank in South Africa.