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12 Dec 2014
Oil prices plunging, resource currencies getting battered – SG
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Research at Societe Generale, shares the end of week summary of FX drivers, noting that big oil importers benefitted greatly due to falling oil prices while exporters faced rate cut surprises.
Key Quotes
“Who would have thought short NOK/JPY was the best G10FX trade of the week? Big oil importer benefits as risk is 'off' and equities fall. Oil exporter is down as its central bank surprises everyone by cutting rates.”
“Meanwhile, oil-sensitive CAD also fell, while AUD can't resist the falling CRB index, especially after it's given a nudge by the RBA while expectations of a February rate cut grow. The Euro is supported by falling US yields and increased buying of Euros vs. CEEFX. The ECB's TLTRO take-up (just under EUR 130bn), increases the chance of sovereign QE in early 2015, but had little impact except on EUR/CHF, which remains anchored to the SNB's floor.”
“Sterling had a quiet week with little 'new news' after the Autumn Statement. Overall, bad for resource currencies and good for the risk-averse yen while the Euro shows once again that it is a 'risk-off' currency when there's a crisis in Russia.”
Key Quotes
“Who would have thought short NOK/JPY was the best G10FX trade of the week? Big oil importer benefits as risk is 'off' and equities fall. Oil exporter is down as its central bank surprises everyone by cutting rates.”
“Meanwhile, oil-sensitive CAD also fell, while AUD can't resist the falling CRB index, especially after it's given a nudge by the RBA while expectations of a February rate cut grow. The Euro is supported by falling US yields and increased buying of Euros vs. CEEFX. The ECB's TLTRO take-up (just under EUR 130bn), increases the chance of sovereign QE in early 2015, but had little impact except on EUR/CHF, which remains anchored to the SNB's floor.”
“Sterling had a quiet week with little 'new news' after the Autumn Statement. Overall, bad for resource currencies and good for the risk-averse yen while the Euro shows once again that it is a 'risk-off' currency when there's a crisis in Russia.”