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Why Haven-linked CHF Defeated Anti-risk JPY| KOL Forex Analysis•Jasper Lo
Abstract：On July 29, the rating agency Fitch revised its outlook on Japan's Long-Term Foreign-Currency Issuer Default Rating to negative from stable, citing the sharp coronavirus-induced economic contraction in Japan. It also affirmed Japan’s sovereign rating at 'A'.
n July 29, the rating agency Fitch revised its outlook on Japan's Long-Term Foreign-Currency Issuer Default Rating to negative from stable, citing the sharp coronavirus-induced economic contraction in Japan. It also affirmed Japans sovereign rating at 'A'.
In fact, the coronavirus pandemic has shocked Japan, dragging its economy worse than other major industrial powers. One of the reasons is the postponement of the Tokyo 2020 Olympic Games, which caused a huge loss on Japan's government and economy. Stock markets in the U.S. and China have rebounded and performed well with the U.S. Nasdaq Composite on its record-breaking run. Nevertheless, Japan lagged far behind the two countries with its Nikkei stock average down 5% since the start of 2020, despite of its position as the third largest economy in the world.
However, JPY crowned champion in the currency competition with USD and RMB. From this January to July 30, JPY has gained about 3.5% from the continued weakness of USD and the support of hedging factors. Consequently, under the sluggish economy, the anti-risk JPY outshone USD and RMB but became the loser against the haven-linked CHF.
The feature of the two safe haven currencies is that, bearish stock markets induced by risk aversion will give full play to the safe-haven role of JPY and USD, sending them spiking; Conversely, if the markets are punished by risk aversion, safe-linked assets such as CHF and gold may benefit from it. Just as the situation on July 29, higher U.S. stocks set DXY back while fueling further gain in currencies other than USD, only pulling JPY back from uptrend.
Though USD is weak, USD/JYP is expected to swell between 106.10 and 104.45. After this, of course, it is more possible to break 104.45 and head towards 103.00.
[About The Author]
Since 1987, Jasper Lo has been engaged in the financial industry
(forex, futures and gold) for more than 32 years and holds forex R.O.,
securities and futures broker licenses. Mr Lo is an expert in trading
forex, precious metals and commodity futures and an basic and technical
analyst.
Over the years, Mr Lo won many individual and team sales champion
awards, as well as outstanding employee awards. He was invited, as a
guest mentor, to the University of Hong Kong, Guangdong Ocean University
and Guangzhou Jinan University. And he was also appointed as the chief
training consultant by Hantang Securities and Dongguan Securities in
China.
Mr Los experience as guest of honor invited by media including Chinese and English newspapers and columnist:
-Guest of honor invited by TVB New Channels such as Finance Channel, Forex Focus, Global Watch
-Guest of honor invited by Now Finance Channel - Forex Reports
-Guest of honor invited by i-CABLE Finance Info Channel - Forex Opportunities
-Guest of honor invited by ViuTV - Investor Smarter Group
-Columnist of Finance and Forex Market of Ming Pao
-Presenter of Finance and Forex Forecast of Ming Pao
-Presenter of Investment 36 Stratagem and Technical Analysis in 1 Min of Ming Bao Finance
-Appointed lecturer of Ming Pao Investment Seminar and Paid Course
-Author of the best seller Investment 36 Stratagem
-Columnist of Forex Expert, Forex Analyst, Marathon Weekly of ET Net
-Guest of honor of Open Good Morning of ET Net
-Guest of honor of Metro Finance Channel - Market Opening, Instant
Market Fighting, Guangdong-Hong Kong Finance, Finances Power, Market
Analysis
-Guest of honor of New Era of Investment of RTHK
-Columnist of Capital Commodities of Capital Weekly
-Guest Presenter of Wang Guanyi Online Finance Channel - Fund and Commercial Bond
-Columnist of Wealthub Finance and Investment Smart Platform of Enrich Culture
-Guest presenter of Weekly Investment in the World of Enrich Culture
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Gold prices retreated below $1,862 after hitting the record high of $2,074.92 on August 6, which is
Gold prices retreated below $1,862 after hitting the record high of $2,074.92 on August 6, which is because traders have widely dumped their long position in the fear of the declining risk aversion considering Russia has successfully registered the COVID-19 vaccine. Thereafter, bargain hunting spurred gold to reclaim the ground of $2,000, but the resistance ahead of $2,015.61 hampered gold again and took a toll over $100. Whether gold will regain its shine and register another record high has become the talking points across financial markets.
Real Purpose for Delivering Gold Back| KOL Forex Analysis•Jasper Lo
Some reports suggest that more than 15 countries (includes Germany, Netherlands, Australia, Italy, France, Switzerland and Russia, etc.) are going to deliver gold back from the U.S. and U.K. According to some analyses, these countries are preparing for de-dollarization and hold a vote of no confidence in U.S. dollar. But from my point of view, these analyses are somewhat farfetched. They didn’t throw light on the real purpose of gold return. In fact, such action is not fresh at all, instead there were several cases over the past decade, in which no one ever claimed de-dollarization at that time.
Some Things Behind Bullish Gold| KOL Forex Analysis•Jasper Lo
Gold prices keep on the run up to other fresh highs after recording $1,920 on July 27. As of the time of writing, gold spot prices have set a new historic record of $2,075.00 for the moment on August 6, while COMEX Gold futures saw its most trading volume in December with the record high of $2,089.20. Financial markets are now enthused to discuss when gold will find its peak?
Alert for Catching Silver’s Last Train| KOL Forex Analysis•Jasper Lo
Prices of precious metals have been rising on the weak DXY since March and even soared in July, wherein silver and gold crowned the best performers with the biggest monthly gains in the decade. Prices of spot gold increased by 11.25% in July while spot silver even picked up 36.40%. Although palladium and platinum swelled 7.95% and 9.22% respectively, it is notable that platinum spot prices have been remaining stable since the beginning of this year, rather than seeing aggressive growth as other three precious metals.
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