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FOREX: Safe Haven FX in Favour as Equities Consolidate Session Declines

FOREX
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  • Broad risk-off trade dominated global markets on Monday, prompting notorious safe haven swithin G10 FX to outperform, while risk sensitive currencies bore the brunt of the waning sentiment.
  • The assumption that US firms will remain market-leaders in artificial intelligence was challenged this weekend with the rise of China's Deepseek - a product demonstrating that not only can AI be rolled out extremely cheaply and effectively, but also that the US' targeted chips sanctions are failing to contain China's tech industry.
  • The USDJPY (-1.10%) selloff picked up momentum following the clean trendline break, drawn from the September lows, bolstered by the breach of a cluster of lows just below the 155 handle.
  • Barring a meaningful reversal, the pair looks set to close below its 50-day EMA, which intersects today at 155.15. This would represent the first close below this average since December 09 and is a meaningful bearish development technically. This paves the way for an extension towards 152.55, a Fibonacci retracement point, and 151.81, the Dec 12 low.
  • AUD (-0.55%) and NZD (-0.47%) are among the poorest performers, with the effect compounded by Trump's tariff sabre-rattling toward Colombia over the weekend. The USD Index is near last week's lows, holding close to the lowest levels of 2025. The Fed decision mid-week looks key here - as Powell's messaging on rates across this year is set to steer price action.
  • Emerging market currencies have been heavily impacted, with notable 2% declines for the likes of the Mexican peso and the South African rand against the dollar providing a key insight to the sensitivities surrounding global equity sentiment and tariff related developments.
  • US durable goods and consumer confidence highlights Tuesday’s docket, before G10 central bank decisions kick off on Wednesday.
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  • Broad risk-off trade dominated global markets on Monday, prompting notorious safe haven swithin G10 FX to outperform, while risk sensitive currencies bore the brunt of the waning sentiment.
  • The assumption that US firms will remain market-leaders in artificial intelligence was challenged this weekend with the rise of China's Deepseek - a product demonstrating that not only can AI be rolled out extremely cheaply and effectively, but also that the US' targeted chips sanctions are failing to contain China's tech industry.
  • The USDJPY (-1.10%) selloff picked up momentum following the clean trendline break, drawn from the September lows, bolstered by the breach of a cluster of lows just below the 155 handle.
  • Barring a meaningful reversal, the pair looks set to close below its 50-day EMA, which intersects today at 155.15. This would represent the first close below this average since December 09 and is a meaningful bearish development technically. This paves the way for an extension towards 152.55, a Fibonacci retracement point, and 151.81, the Dec 12 low.
  • AUD (-0.55%) and NZD (-0.47%) are among the poorest performers, with the effect compounded by Trump's tariff sabre-rattling toward Colombia over the weekend. The USD Index is near last week's lows, holding close to the lowest levels of 2025. The Fed decision mid-week looks key here - as Powell's messaging on rates across this year is set to steer price action.
  • Emerging market currencies have been heavily impacted, with notable 2% declines for the likes of the Mexican peso and the South African rand against the dollar providing a key insight to the sensitivities surrounding global equity sentiment and tariff related developments.
  • US durable goods and consumer confidence highlights Tuesday’s docket, before G10 central bank decisions kick off on Wednesday.