Check out the brand new DailyFX trading forecasts[1] for Q3
MARKET DEVELOPMENTS – USD[2] AND JPY[3] SOARS VS EUR[4], TRY AND GOLD
US equity futures relatively lacklustre to begin the week, while European equities continue to remain on the backfoot with banking names feeling the brunt from the continued sell off in the Turkish Lira.
USD: The volatility within the emerging market currencies, most notably the Turkish Lira, which gapped higher to a fresh record low of 7.2, continues to spark a safe haven bid in the USD index. The USD is clear of the 96 handle, with little in the way of resistance till the 98 handle. As result of the gains in the USD index, major FX pairs are suffering as a result with the Euro hitting a 1yr low at 1.1365.
TRY: The main focus for market participants is the Turkish Lira, which gapped lower on reduced optimism that Turkey will look to use traditional measures to support the currency. During the European morning, the Turkish banking regulator announced measures aimed at improving domestic liquidity as opposed to stopping the plunge in the Lira, while the Finance has promised to unveil a plan in order to calm markets.
JPY: Much like the USD, the Japanese Yen has been among the notable beneficiary from the negative sentiment stemming from the sell in EM currencies. USDJPY[5] broke through key support at 110.50, however, focus will be on for a close below 110.50 to confirm a material move lower. Large option expiries of 1.3bln from 110.00-05 keeps the pair underpinned.
Gold: One asset that has
