BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Currencies

Currencies weaker as dollar stays strong, Japan stocks higher

Posted on November 24, 2016

Asian markets outside Japan are treading cautiously in the wake of solid US data that bolstered the case for a near-term rate rise from the Federal Reserve and triggered another bout of dollar strength.

Japan is at the centre of the action today by way of news from the US. A solid rise in US durable goods orders and minutes from the Federal Reserve’s November meeting showing the case for a rate rise had strengthened boosted the dollar overnight and led to a hefty 1.2 per cent drop for the yen.

The Japanese currency was a further 0.2 per cent weaker on Thursday at ¥112.69 per dollar, with the whole move being supportive of Japanese shares, particularly exporters. The benchmark Topix was up 0.8 per cent, while the price-focused Nikkei 225 gained 1 per cent as the market reopened after a holiday on Wednesday.

The yield (which moves inversely to price) on 10-year Japanese government bonds was up 1 basis point at the highest level since mid-February.

The dollar index, a measure of the US currency against a basket of global peers, was up 0.1 per cent today at 101.82 and eyeing its 12th gain in 14 sessions. All other Asian currencies were weaker today, with Malaysia’s ringgit among the worst. Weaker by 0.5 per cent at 4.4645 ringgit per dollar, the Malaysian currency was at its lowest level since the Asian financial crisis in early 1998.

Other emerging Asian markets currencies were also weaker, including 0.4 per cent declines for Indonesia’s rupiah and Thai baht, and a 0.3 per cent drop for the Philippine peso.

China’s renminbi weakened to more than Rmb6.9 per dollar, marking a more than 10 per cent decline since the currency’s one-off devaluation in August last year.

Australia’s S&P/ASX 200 surrendered early gains to be 0.1 per cent weaker, while Hong Kong’s Hang Seng was down 0.5 per cent. China’s Shanghai Composite and the technology-focused Shenzhen Composite were both up 0.1 per cent.