Well, the man in the White House strikes once more, this time responding to China who seem to have sent letters to leaders around the world with demands on exports of their critical minerals. Trump responded by announcing 100% additional tariffs on China’s US bound exports by November 1st. 

To this the market volatility rose sharply with the VIX trading above 22.00 for the first time since August. 

With this came some changes to the currency strength meter, some reflecting this risk off response.

Let’s take a look at what moved last week.

Strong Currencies

My currency strength meter highlights these currencies as the strongest as of last week:

  1. USD: The volatility of last week only aided the USD especially against the risk off currencies like the NZD and AUD. Now it claims the top spot at +7, so upside could be limited. 

  2. CHF: The Swiss Franc claims the second spot on the CSM at +5. This has been a currency used by the market this year with the Swiss National Bank heading for negative rates. 

Weak Currencies

Looking at the opposite side of the strength meter now, these are the weakest of last week:

  1. AUD: Last week I stated the Aussie is the top dog and we don’t want to go against it right now. Well how the markets can change. One big moment and this seems to have displaced the Aussie and it now is the weaker market. 

  2. NZD: If you were short NZD last week this would have been beneficial. This looks likely to continue with the RBNZ cutting aggressively recently and forward guidance looking shaky. 

Markets to watch

Based off of the above these are the currency pairs on my trading watchlist:

Bullish

Bearish

AUDUSD

NZDUSD

AUDCHF

NZDCHF

Keep Reading

No posts found