* Mexican peso up 2.4%, annual inflation eases in March * Fitch downgrades Argentina after payments freeze * Chile March exports fall; 7.6% drop in value of copper shipments (Updates prices) By Susan Mathew and Ambar Warrick April 7 (Reuters) - Latin American assets extended their recovery into a second session on Tuesday, as risk assets were propped up by hopes that the coronavirus outbreak had peaked in several hotspots. "If the incipient recovery in risk appetite and commodity prices continues and ... the global economy starts to recover in the second half of the year, most EM currencies will probably recover more of the ground they have lost this year," said Jonas Goltermann, senior economist at Capital Economics. Brazil's real added 1.3%, while the Colombian peso rose 1.9% against a weaker dollar.
Gold markets initially took off to the upside during the trading session on Tuesday, reaching towards the $1750 level. At this point, the market then rolled over to show signs of exhaustion. The exhaustion showing that although we have broken out, there is still plenty to fight about.
The itch among some gold holders to cash out after a three-day rally also took some shine off the precious metal in its New York session. Gold futures on New York’s COMEX settled down $12.20, or 0.7%, at $1,664.80 per ounce. It hit $1,742.20 at the session high, bettering Monday’s $1,709.50 peak, before investors took note of reports that the Covid-19 infection rate in New York, the U.S. epicenter for the pandemic, was stabilizing despite daily death tolls in the hundreds.
The British pound recovered and U.K. stocks rose Tuesday, as concern over the hospitalization of British Prime Minister Boris Johnson was offset by broader optimism the coronavirus crisis was slowing.
The US dollar has pulled back against the Japanese yen during the trading session on Tuesday, but then started to bounce the show signs of life again. This is a “risk on” move, and it looks like we are probably going to test the top of the range.
The British pound initially fell during the trading session on Tuesday but turned around to show signs of strength during the day. That being said, there is still a significant amount of resistance above.
The British pound initially pulled back against the Japanese yen but then shot towards the upside as the market is likely to go head-on with the selling pressure. At this point, the market is likely to go higher, perhaps trying to fill the gap above or at least getting back to the ¥137 level.
The Euro pulled back slightly during the open on Tuesday, but then shot straight up towards the 1.09 handle where there would be a significant amount of resistance. All things being equal, the market is likely to continue seeing a lot of back and forth.
The Australian dollar pulled back slightly during the trading session on Tuesday but found enough buyers to slam into the 0.62 level at the beginning of the US session. This is an area that should offer a significant amount of resistance, so paying attention to this level is worthwhile.
Based on the early price action and the current price at 1.0908, the direction of the EUR/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the 50% level at 1.0892.
With gold at a multi-year high, investors have to be careful about buying too aggressively especially if other investors feel that stocks are extremely cheap and have a better potential return.
(Bloomberg) -- Emerging-market currencies offer the best buying opportunity in more than two decades, according to Charlie Robertson, Renaissance Capital’s global chief economist.The London-based strategist said he particularly likes the South African rand, Mexican peso and Brazilian real, which happen to be the three hardest-hit major currencies this year. His bull case is based on historically cheap valuations, funding support from multilateral lenders and the prospect of a weaker U.S. dollar. Meantime, he said crude oil prices could rebound to $45 or $50 per barrel “medium term,” buoying assets such as Russia’s ruble.“It’s the best time to buy emerging markets in over 20 years,” Robertson, 48, said in an interview on Monday. “This is the cheapest opportunity since the last time everyone hated EM after the Asian crisis and Russian default.”Pimco Adviser Boosts Bet on Emerging Markets as Trade of DecadeRobertson, who earned plaudits for a wager on Romanian bonds in the late 1990s as well as a bet on South Africa’s rand in 2016, is among a contingent of contrarians flagging emerging-market bargains, even as some of the world’s biggest money managers warn of more pain to come. MSCI’s developing-nation currency gauge hit a three-year low last month, and Robertson’s top picks in South Africa, Mexico and Brazil are testing their weakest levels ever.Those sell-offs may soon reverse as Renaissance Capital expects the International Monetary Fund and World Bank to backstop many developing nations, while U.S. President Donald Trump pushes for a cheaper dollar.“These are remarkable valuation levels,” Robertson said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The US dollar is broadly weaker against its major counterparts in early trading on Tuesday but the weakness wasn’t enough to elicit a technical breakout for the GBP/USD pair.
European stocks climbed for a second day as traders focused on data showing that the growth rate of the coronavirus spread is slowing.