FXStreet (Bali) – Economic fundamentals do not support commodity currency gains, according to BNP Paribas.
Key Quotes
“The USD’s weakening trend has continued overnight with commodity exporter and EM currencies continued to outperform. We remain cautious that the re-surgence of ‘risky’ currencies can continue given the underlying economic fundamentals (as highlighted by yesterday’s soft Canadian and Australian trade data) and scope for central banks (particularly the BoC and RBA) to cut rates.”
“Furthermore, Fed’s Williams overnight continued to comment that rates could be raised before year-end. Attention will be on the remaining Fed speakers this week (Bullard, Kocherlakota, Lockhart and Evans) for whether a rate hike this year remains a possibility.”
“Elsewhere, ECB Draghi’s speech yesterday did not deliver and policy signals ahead of the 22 October meeting with his focus art and culture. Finally, China’s September reserves data suggests that reserved decline by around USD 44bn during the month (ex valuation), around half the pace of decline in August.”
(Market News Provided by FXstreet)