FOREX-Dollar/yen hits 1-month high as investors reassess stance, reverse b… – Reuters


By Shinichi Saoshiro
| TOKYO

TOKYO The dollar rose to a one-month high against the yen on Wednesday as investors reversed the bets they had made on speculation that the U.S. Federal Reserve would not hike interest rates anytime soon.

That reversal saw the dollar, which was at around 100.500 yen at the start of the week, extend an overnight rally as far as 103.230 yen JPY=, its highest since July 29.

Dogged by rate hike uncertainty, the dollar dropped to as low as 99.550 yen in mid-August and came within sight of 99.000 yen — a 2-1/2-year low struck in June against the safe-haven Japanese currency after the Brexit vote.

The euro EUR= was little changed at .1153, hovering near a three-week low of .1133 plumbed on Tuesday. The common currency was poised to lose 0.2 percent on the month.

The greenback has been on a bullish footing since Friday’s comments by Fed Chair Janet Yellen revived expectations the central bank could hike rates as early as September.

Upbeat data released on Tuesday helped the dollar extend gains, with the Conference Board saying its consumer confidence index rose to an 11-month high in August. Other data showed that U.S. house price growth moderated in June but was still strong. ECONUS

“Despite much previous excitement over the yen’s potential strength, it failed to convincingly crack the 100 yen (per dollar) mark. This, combined with the latest Fed rate hike views, is prompting participants to square some of their yen longs,” said Masashi Murata, senior forex strategist at Brown Brothers Harriman in Tokyo.

“While the positive surprise from the U.S. consumer confidence data helped, the dollar’s strength goes beyond fundamental factors,” Murata said.

Yen bulls were also kept in check after Japan’s Chief Cabinet Secretary Yoshihide Suga told Reuters on Tuesday that the government will respond “appropriately” to unwelcome yen gains.

Analysts believe the reversal of yen longs could continue for a while, since investors had built up significant positions betting on the Japanese currency rising.

Latest data from the Commodity Futures Trading Commission showed that speculators raised net long positions on the yen for the week ended Aug.23 to their highest since early July.

The speculators’ aggregate net long position was the smallest since early July, suggesting the greenback has more room to rise against other currencies.

The dollar index .DXY was little changed at 95.956 after rising to 96.143 overnight, its highest since August 9. It was still on track to lose about 1 percent in August after falling mid-month to a near two-month low of 94.077.

Attention has switched to Friday’s U.S. August non-farm payrolls report and with it a chance to assess whether the U.S. economy is robust enough to withstand monetary tightening.

But investors will first digest the ADP employment data and the Chicago purchasing managers’ index (PMI) due later on Wednesday.

“The 104 level will come into view for dollar/yen if the U.S. ADP employment report beats expectations,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

He noted, however, that dollar/yen may have gone too far, given some risk aversion from falls in crude oil and U.S. stocks and flat Treasury yields.

The Australian dollar edged up 0.2 percent to .7526 AUD=D4 on bargain hunting after its overnight slide to a one-month trough of .7500 against the broadly stronger U.S. currency.

The Aussie was set to lose 1 percent versus the dollar this month, although it had risen to a near four-month high of .7760 early in August with Australia’s relatively higher yields a draw for investors escaping negative rates in the euro zone and Japan.

(Reporting by Shinichi Saoshiro; Editing by Richard Borsuk and Eric Meijer)

FOREX-Dollar/yen hits 1-month high as investors reassess stance, reverse b… – Reuters


By Shinichi Saoshiro
| TOKYO

TOKYO The dollar rose to a one-month high against the yen on Wednesday as investors reversed the bets they had made on speculation that the U.S. Federal Reserve would not hike interest rates anytime soon.

That reversal saw the dollar, which was at around 100.500 yen at the start of the week, extend an overnight rally as far as 103.230 yen JPY=, its highest since July 29.

Dogged by rate hike uncertainty, the dollar dropped to as low as 99.550 yen in mid-August and came within sight of 99.000 yen — a 2-1/2-year low struck in June against the safe-haven Japanese currency after the Brexit vote.

The euro EUR= was little changed at .1153, hovering near a three-week low of .1133 plumbed on Tuesday. The common currency was poised to lose 0.2 percent on the month.

The greenback has been on a bullish footing since Friday’s comments by Fed Chair Janet Yellen revived expectations the central bank could hike rates as early as September.

Upbeat data released on Tuesday helped the dollar extend gains, with the Conference Board saying its consumer confidence index rose to an 11-month high in August. Other data showed that U.S. house price growth moderated in June but was still strong. ECONUS

“Despite much previous excitement over the yen’s potential strength, it failed to convincingly crack the 100 yen (per dollar) mark. This, combined with the latest Fed rate hike views, is prompting participants to square some of their yen longs,” said Masashi Murata, senior forex strategist at Brown Brothers Harriman in Tokyo.

“While the positive surprise from the U.S. consumer confidence data helped, the dollar’s strength goes beyond fundamental factors,” Murata said.

Yen bulls were also kept in check after Japan’s Chief Cabinet Secretary Yoshihide Suga told Reuters on Tuesday that the government will respond “appropriately” to unwelcome yen gains.

Analysts believe the reversal of yen longs could continue for a while, since investors had built up significant positions betting on the Japanese currency rising.

Latest data from the Commodity Futures Trading Commission showed that speculators raised net long positions on the yen for the week ended Aug.23 to their highest since early July.

The speculators’ aggregate net long position was the smallest since early July, suggesting the greenback has more room to rise against other currencies.

The dollar index .DXY was little changed at 95.956 after rising to 96.143 overnight, its highest since August 9. It was still on track to lose about 1 percent in August after falling mid-month to a near two-month low of 94.077.

Attention has switched to Friday’s U.S. August non-farm payrolls report and with it a chance to assess whether the U.S. economy is robust enough to withstand monetary tightening.

But investors will first digest the ADP employment data and the Chicago purchasing managers’ index (PMI) due later on Wednesday.

“The 104 level will come into view for dollar/yen if the U.S. ADP employment report beats expectations,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

He noted, however, that dollar/yen may have gone too far, given some risk aversion from falls in crude oil and U.S. stocks and flat Treasury yields.

The Australian dollar edged up 0.2 percent to .7526 AUD=D4 on bargain hunting after its overnight slide to a one-month trough of .7500 against the broadly stronger U.S. currency.

The Aussie was set to lose 1 percent versus the dollar this month, although it had risen to a near four-month high of .7760 early in August with Australia’s relatively higher yields a draw for investors escaping negative rates in the euro zone and Japan.

(Reporting by Shinichi Saoshiro; Editing by Richard Borsuk and Eric Meijer)

FOREX-Dollar/yen hits 1-month high as investors reassess stance, reverse b… – Reuters


By Shinichi Saoshiro
| TOKYO

TOKYO The dollar rose to a one-month high against the yen on Wednesday as investors reversed the bets they had made on speculation that the U.S. Federal Reserve would not hike interest rates anytime soon.

That reversal saw the dollar, which was at around 100.500 yen at the start of the week, extend an overnight rally as far as 103.230 yen JPY=, its highest since July 29.

Dogged by rate hike uncertainty, the dollar dropped to as low as 99.550 yen in mid-August and came within sight of 99.000 yen — a 2-1/2-year low struck in June against the safe-haven Japanese currency after the Brexit vote.

The euro EUR= was little changed at .1153, hovering near a three-week low of .1133 plumbed on Tuesday. The common currency was poised to lose 0.2 percent on the month.

The greenback has been on a bullish footing since Friday’s comments by Fed Chair Janet Yellen revived expectations the central bank could hike rates as early as September.

Upbeat data released on Tuesday helped the dollar extend gains, with the Conference Board saying its consumer confidence index rose to an 11-month high in August. Other data showed that U.S. house price growth moderated in June but was still strong. ECONUS

“Despite much previous excitement over the yen’s potential strength, it failed to convincingly crack the 100 yen (per dollar) mark. This, combined with the latest Fed rate hike views, is prompting participants to square some of their yen longs,” said Masashi Murata, senior forex strategist at Brown Brothers Harriman in Tokyo.

“While the positive surprise from the U.S. consumer confidence data helped, the dollar’s strength goes beyond fundamental factors,” Murata said.

Yen bulls were also kept in check after Japan’s Chief Cabinet Secretary Yoshihide Suga told Reuters on Tuesday that the government will respond “appropriately” to unwelcome yen gains.

Analysts believe the reversal of yen longs could continue for a while, since investors had built up significant positions betting on the Japanese currency rising.

Latest data from the Commodity Futures Trading Commission showed that speculators raised net long positions on the yen for the week ended Aug.23 to their highest since early July.

The speculators’ aggregate net long position was the smallest since early July, suggesting the greenback has more room to rise against other currencies.

The dollar index .DXY was little changed at 95.956 after rising to 96.143 overnight, its highest since August 9. It was still on track to lose about 1 percent in August after falling mid-month to a near two-month low of 94.077.

Attention has switched to Friday’s U.S. August non-farm payrolls report and with it a chance to assess whether the U.S. economy is robust enough to withstand monetary tightening.

But investors will first digest the ADP employment data and the Chicago purchasing managers’ index (PMI) due later on Wednesday.

“The 104 level will come into view for dollar/yen if the U.S. ADP employment report beats expectations,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

He noted, however, that dollar/yen may have gone too far, given some risk aversion from falls in crude oil and U.S. stocks and flat Treasury yields.

The Australian dollar edged up 0.2 percent to .7526 AUD=D4 on bargain hunting after its overnight slide to a one-month trough of .7500 against the broadly stronger U.S. currency.

The Aussie was set to lose 1 percent versus the dollar this month, although it had risen to a near four-month high of .7760 early in August with Australia’s relatively higher yields a draw for investors escaping negative rates in the euro zone and Japan.

(Reporting by Shinichi Saoshiro; Editing by Richard Borsuk and Eric Meijer)

Forex – USD/CAD at 3-week highs after mixed Canadian data – Investing.com

© Reuters. Greenback gains ground vs. loonie amid U.S. rate hike talk

Investing.com – The U.S. dollar rose to three-week highs against its Canadian counterpart on Tuesday, after the release of mixed data from Canada and as expectations for a near-term U.S. rate hike continued to lend broad support to the greenback.

USD/CAD hit 1.3047 during early U.S. trade, the pair’s highest since August 11; the pair subsequently consolidated at 1.3062, gaining 0.38%.

The pair was likely to find support at 1.2970, Monday’s low and resistance at 1.3125, the high of August 10.

Statistics Canada said the current account deficit widened to C.9 billion in the second quarter from C.6 billion in the first quarter, whose figure was revised from a previously estimated deficit of C.8 billion.

Analysts had expected the current account deficit to widen to C.5 billion in the last quarter.

A separate report showed that the raw materials price index declined by 2.7% in July, confouding expectations for a 1.2% fall. The RMPI rose 2.0% in June, whose figure was revised from a previously estimated 1.8% gain.

The greenback remained supported after Federal Reserve Vice Chairman Stanley Fischer said earlier Tuesday that the U.S. labor market is almost at full strength and the pace of interest rate increases will be data dependent.

The comments came during an interview with Bloomberg TV as investors looked ahead to the nonfarm payrolls report for July, scheduled for Friday.

The U.S. dollar had already strengthened broadly after Fed Chair Janet Yellen said in a speech at Jackson Hole last Friday that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market and hopes for modest economic growth.

The loonie was lower against the euro, with EUR/CAD adding 0.10% to 1.4571.

Government Launches 2019 Financial Sector Review – Mondaq News Alerts (registration)

On August 26th, the federal Department of Finance
launched a review of the legislation governing banks, insurance
companies and trust companies under federal jurisdiction by issuing
an initial consultation paper. The initial paper sets out
some key facts relating to the sector and comments on trends that
are currently impacting and are expected to continue to impact the
sector. The paper concludes by inviting comment on certain high
level policy questions.

As most financial institutions are, at least in part, governed
by federal legislation, the 2019 review could have wide-ranging
implications for the sector. Comments on the questions set out in
the paper are due by November 15, 2016.

Key facts and noted trends

The paper describes the current economic environment in which
the sector operates which is marked by low interest rates and
historically high levels of consumer debt. It also notes the high
levels of concentration in certain of the financial services
sectors but also notes that there has been a trend towards
internationalization by the largest Canadian institutions. Other
key trends mentioned in the paper are noted below.

Growing acceptance of electronic transactions

The paper notes that most routine financial transactions are now
conducted electronically and that many consumers are embracing new
technologies such as online and mobile banking. To put this in
context, for many years, the banking sector in Canada has been
dominated by six large banks that maintain extensive branch
networks covering the entire country. The trend towards greater
acceptance of electronic means of transacting has led many of the
large banks to pursue efficiencies and adjust their branch
networks.

The paper notes concerns about the implication of this trend
both for consumers and for the profitability of some banks.

Fintech

Closely related to consumer attitudes to electronic commerce is
the emergence of a financial technology sector. The paper notes
that much of the recent innovation respecting financial services is
the product of emerging fintech start-up companies.  Some of
these fintech start-ups have developed consumer-facing technology
in the areas of payments, lending and investment management. Others
have focused on supporting infrastructures including data
analytics, funds transfers, smart contracts, cybersecurity and
currency exchanges. Some fintech companies have adopted distributed
ledger technology (blockchain) to record and validate
transactions.

While the paper notes the positive contribution that fintech
companies are making to innovation and competition in the financial
services sector, it also notes that this trend raises questions
about the adequacy of existing consumer protection laws to address
the changes being introduced through this technology. It also
questions whether it is necessary to introduce changes to the
regulatory framework to ensure a level playing field between
fintech companies and regulated financial institutions.

Higher level of concentration

Concentration continues to be a feature of the sector with the
largest competitors in the banking and life insurance industries
controlling 93% and 90% of the total assets of their respective
industries. Again, the concern expressed is whether there is
adequate competition in these sectors given the high levels of
concentration.

The policy objectives

The paper identified three objectives that the government says
must be balanced in the policy framework. They are described
as:

stability: is the sector is safe, sound and
resilient in the face of stress

efficiency: does the sector provides
competitively priced products and services, and does it pass
efficiency gains to customers, accommodate innovation, and does it
effectively contribute to economic growth

utility: does the sector meets the financial
needs of an array of consumers, including businesses, individuals
and families, and are the interests of consumers are protected

Questions for consultation

The paper invites comment on the following questions:

  1. What are your views on the trends and challenges identified in
    this paper? Are there other trends or challenges that you expect to
    significantly influence the financial sector going forward?
  2. How well does the financial sector framework currently balance
    trade-offs between the three core policy objectives of stability,
    efficiency and utility?
  3. Are there lessons that could be learned from other
    jurisdictions to inform how to address emerging trends and
    challenges?
  4. What actions could be taken to strengthen the financial sector
    framework and promote economic growth, including with respect to
    the identified themes? How should those actions be prioritized?For
    example:

    • How should the financial sector framework support innovation
      and competition while maintaining stability of the system?
    • How can the financial sector framework best promote
      competition, including by encouraging new entrants and fostering
      the growth of small entities and other players?
    • How can the benefits of an internationalizing financial sector
      best be obtained while ensuring the safety and soundness of the
      sector?
    • How can the financial sector framework support financial firms
      to best serve the evolving needs and interests of consumers?
    • Are Canada’s federal financial sector oversight bodies
      well-positioned to support the sector in the future?
  5. What other actions should be taken to ensure the financial
    sector framework remains modern and technically sound?

Again, comments are requested by November 15, 2016.


About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the
world’s preeminent corporations and financial institutions with
a full business law service. We have 3800 lawyers and other legal
staff based in more than 50 cities across Europe, the United
States, Canada, Latin America, Asia, Australia, Africa, the Middle
East and Central Asia.

Recognized for our industry focus, we are strong across all the
key industry sectors: financial institutions; energy;
infrastructure, mining and commodities; transport; technology and
innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global
business principles of quality, unity and integrity. We aim to
provide the highest possible standard of legal service in each of
our offices and to maintain that level of quality at every point of
contact.

For more information about Norton Rose Fulbright, see
nortonrosefulbright.com/legal-notices.

Law around the world

nortonrosefulbright.com

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

Forex – USD/CAD at 3-week highs after mixed Canadian data – Investing.com

© Reuters. Greenback gains ground vs. loonie amid U.S. rate hike talk

Investing.com – The U.S. dollar rose to three-week highs against its Canadian counterpart on Tuesday, after the release of mixed data from Canada and as expectations for a near-term U.S. rate hike continued to lend broad support to the greenback.

USD/CAD hit 1.3047 during early U.S. trade, the pair’s highest since August 11; the pair subsequently consolidated at 1.3062, gaining 0.38%.

The pair was likely to find support at 1.2970, Monday’s low and resistance at 1.3125, the high of August 10.

Statistics Canada said the current account deficit widened to C.9 billion in the second quarter from C.6 billion in the first quarter, whose figure was revised from a previously estimated deficit of C.8 billion.

Analysts had expected the current account deficit to widen to C.5 billion in the last quarter.

A separate report showed that the raw materials price index declined by 2.7% in July, confouding expectations for a 1.2% fall. The RMPI rose 2.0% in June, whose figure was revised from a previously estimated 1.8% gain.

The greenback remained supported after Federal Reserve Vice Chairman Stanley Fischer said earlier Tuesday that the U.S. labor market is almost at full strength and the pace of interest rate increases will be data dependent.

The comments came during an interview with Bloomberg TV as investors looked ahead to the nonfarm payrolls report for July, scheduled for Friday.

The U.S. dollar had already strengthened broadly after Fed Chair Janet Yellen said in a speech at Jackson Hole last Friday that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market and hopes for modest economic growth.

The loonie was lower against the euro, with EUR/CAD adding 0.10% to 1.4571.

Forex – USD/CAD at 3-week highs after mixed Canadian data – Investing.com

© Reuters. Greenback gains ground vs. loonie amid U.S. rate hike talk

Investing.com – The U.S. dollar rose to three-week highs against its Canadian counterpart on Tuesday, after the release of mixed data from Canada and as expectations for a near-term U.S. rate hike continued to lend broad support to the greenback.

USD/CAD hit 1.3047 during early U.S. trade, the pair’s highest since August 11; the pair subsequently consolidated at 1.3062, gaining 0.38%.

The pair was likely to find support at 1.2970, Monday’s low and resistance at 1.3125, the high of August 10.

Statistics Canada said the current account deficit widened to C.9 billion in the second quarter from C.6 billion in the first quarter, whose figure was revised from a previously estimated deficit of C.8 billion.

Analysts had expected the current account deficit to widen to C.5 billion in the last quarter.

A separate report showed that the raw materials price index declined by 2.7% in July, confouding expectations for a 1.2% fall. The RMPI rose 2.0% in June, whose figure was revised from a previously estimated 1.8% gain.

The greenback remained supported after Federal Reserve Vice Chairman Stanley Fischer said earlier Tuesday that the U.S. labor market is almost at full strength and the pace of interest rate increases will be data dependent.

The comments came during an interview with Bloomberg TV as investors looked ahead to the nonfarm payrolls report for July, scheduled for Friday.

The U.S. dollar had already strengthened broadly after Fed Chair Janet Yellen said in a speech at Jackson Hole last Friday that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market and hopes for modest economic growth.

The loonie was lower against the euro, with EUR/CAD adding 0.10% to 1.4571.

Forex – USD/CAD at 3-week highs after mixed Canadian data – Investing.com

© Reuters. Greenback gains ground vs. loonie amid U.S. rate hike talk

Investing.com – The U.S. dollar rose to three-week highs against its Canadian counterpart on Tuesday, after the release of mixed data from Canada and as expectations for a near-term U.S. rate hike continued to lend broad support to the greenback.

USD/CAD hit 1.3047 during early U.S. trade, the pair’s highest since August 11; the pair subsequently consolidated at 1.3062, gaining 0.38%.

The pair was likely to find support at 1.2970, Monday’s low and resistance at 1.3125, the high of August 10.

Statistics Canada said the current account deficit widened to C.9 billion in the second quarter from C.6 billion in the first quarter, whose figure was revised from a previously estimated deficit of C.8 billion.

Analysts had expected the current account deficit to widen to C.5 billion in the last quarter.

A separate report showed that the raw materials price index declined by 2.7% in July, confouding expectations for a 1.2% fall. The RMPI rose 2.0% in June, whose figure was revised from a previously estimated 1.8% gain.

The greenback remained supported after Federal Reserve Vice Chairman Stanley Fischer said earlier Tuesday that the U.S. labor market is almost at full strength and the pace of interest rate increases will be data dependent.

The comments came during an interview with Bloomberg TV as investors looked ahead to the nonfarm payrolls report for July, scheduled for Friday.

The U.S. dollar had already strengthened broadly after Fed Chair Janet Yellen said in a speech at Jackson Hole last Friday that the case for raising U.S. interest rates has strengthened in recent months, citing improvements in the labor market and hopes for modest economic growth.

The loonie was lower against the euro, with EUR/CAD adding 0.10% to 1.4571.