Archives of “May 28, 2019” day

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Pakistani clerics have issued a fatwa against USD buying

  
  Analysis

So there you go, obviously the dollar top is in 😀

  • Religious scholars in Pakistan have declared that hoarding dollars is a “grave sin”
  • “We have issued a fatwa which says that people must not hoard dollars as hoarding creates chaos,” said Maulana Tahir Ashrafi, the head of the Pakistan Ulema Council, a network of Sunni Muslim clerics.
  • “Unnecessary purchases of dollars must be avoided till such time as Pakistan comes out of the prevailing crisis that we face today”
Mr Ashrafi was speaking with the Financial Times. Link for more (may be gated, oh, heads up – perhaps a fatwa will be issued against you if you try to bypass the paywall).
Good for a giggle. Having said that though, there are plenty of views about the market that border on religious fervour. My latest technical analysis on the AUD, for example:
So there you go, obviously the dollar top is in :-D

FOREX : AUD/USD forecasts from 2 banks, 0.68 tipped by both

  
Analysis, Forex

Scanning some of the projections for the Australian dollar issued over past days.

Via CBA and Westpac. neither are overly bearish on the AUD.
Westpac, in summary:
On what sent the AUD lower:
  • weak Q1 CPI …, stoked RBA easing expectations
  • rise in the unemployment rate in April appeared to seal the case for RBA action
WPAC note the limited follow-through below 0.6900
Support for AUD from:
  • commodity price basket has rebounded sharply since early April
Ahead:
  • A$ rallies should be capped by RBA rate cuts in June and August and by the deterioration in US-China trade relations
  • but with OIS markets already priced for a sub-1% cash rate by 2020, we see AUD/USD only down to 0.68 by September
CBA:
  • expect AUD to fall towards 0.68 by the end of September
  • expect the RBA to cut the cash rate by 25bps  at the june June meeting (next week, Tuesday June 4)
Similar to Westpac CBA reason the downside for the AUD is limited by the market already pricing the rate cut
  • CBA see another RBA cut in August
CBA point out positives for the economy (and AUD):
  • The APRA proposing easing bank lending restrictions – will help stabilise Australian house prices
  • Election out the way reduces political uncertainty, positive for capex and job growth
  • US Fed likely to cut rates this year and next (likely US dollar fall, AUD to benefit)

China Global Times: US tries to suppress China, steal away interests, wants to rob China

  
Analysis, Economy

A very strongly worded opinion piece in the Chinese press, Global Times

When I say strongly worded, this (bolding mine, very confrontational):
  • What on earth does the US want with China? … Does it … seek to break the Chinese economy as its ultimate goal? 
  • For the sake of …  world peace … 
  • Washington rudely tries to use a tariff war to suppress China. US vice president and US secretary of state issued fierce speeches recently. The US is also opposing almost all of China’s actions on the international stage and is suppressing Huawei savagely. This behavior makes most Chinese believe the US is against China’s development, and the real purpose of the US is to deprive China of its development ability and the so-called fair trade is just an excuse for stealing away interests. In other words, the US wants to rob China of not only its money but also its future.
Media in China is not free of state control (cough) – this opinion piece won’t be too far out of line with official thinking.
Not a risk positive.
Chinese press, Global Times Xi at war with the US 
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