Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Tech stocks crumble on US slowdown fears
Global markets continued to lose ground overnight led by the ongoing fall in US technology stocks.
The tech-focused Nasdaq index lost a massive 4.0% overnight with the benchmark now down 13.1% from last month’s highs. A fall of more than 10% from recent highs is a widely-used definition of a correction.
The US’s Dow Jones fell 2.1% overnight while the S&P 500 lost 2.7%.
In FX markets, most risk-sensitive currencies like the Aussie, kiwi and GBP fell.
The AUD/USD lost 0.5% with the market continuing to trade within the range between 0.6200 and 0.6400.
The NZD/USD lost 0.3% but the kiwi’s relative outperformance versus the Aussie saw the NZD/AUD climb towards the year’s highs.
The Singapore dollar and Chinese yuan were also weaker. The USD/SGD gained 0.2% while USD/CNH climbed 0.3%.
UK retail resilience fading as GBP rally nears ceiling
The euro and British pound remain the stronger performers in FX markets however both the GBP/USD and EUR/USD have produced short-term reversals near the four-month highs overnight.
Early today, the UK BRC sales monitor will be revealed. According to official figures, sales grew by a strong 2.5% year-over-year on the BRC like-for-like measure in January, with a respectable volume increase.
Accordingly, the last two BRC measurements have been much higher than the average for 2010–19 of 0.4% year over year.
Malaysia’s stable jobs may boost ringgit
Today, Malaysia’s unemployment rate will be revealed.
In January, we anticipate that the seasonally adjusted unemployment rate will be steady at 3.2%, supported by ongoing resilience, especially in the services sector.
The ringgit’s superior performance in Asia is supported by Malaysia’s better trade balance and perhaps larger tourist surplus.
USD/MYR faces key resistance levels of 50-day 4.4396 and 200-day 4.4719 next where MYR buyers may look to take advantage.
Euro extends outperformance
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 10 – 15 March
All times AEDT
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.