Thursday , May 6 2021

Flash on the foreign exchange market

In a low liquid environment, the yen jumped against the Australian dollar and the lira in the midst of the wave of sales orders.

It took seven minutes to reach levels I have not seen for almost a decade. In that period, the Japanese currency jumped by almost 8% compared to the Australian dollar at the highest price since 2009, and has risen 10% compared to the Turkish lira.

Currency grew at least 1% in relation to all its G-10 peers, breaking the 72-yard Australian-dollar barrier remaining in the trade war, volatility in stock markets, a dispute over the Italian budget, and an increase in Federal reserves.

Traders in Asia and Europe are still trying to figure out what happened in those minutes when orders were ordered for the sale of Australian dollars and Turkish lira against the yen.

Some pointed to increased risk aversion caused by Apple's sales projections, while others pointed out that retail investors in Japan had disarmed the loss of positions. But no matter, the move was worsened by algorithmic programs and low liquidity that caused a vacation in the Asian country.

"The moves were very violent, and they needed a few surprises," said Stephen Miller, Advisor to Grant Samuel Funds Management Pty in Sydney, and former head of fixed income at BlackRock Investment Management in Australia.

Since the Japanese market this week is closed for a four-day vacation, traders say they are struggling with a wave of sales orders at unpredictable prices. When the yen strengthened above $ 105.05, some were forced to cover their short positions in the yen, they say from the market.

"It's more like a liquidity event because the movement happened in a window between New York and Asia," said Damien Loh, the CIO Singapore Capital Ensemble hedge fund, adding that it was "getting worse by going to Japan and selling to small investors."

As a result, yen grew in relation to all currencies followed by Bloomberg, and in 9.30 (London) it rose by 1% compared to the dollar at 107.78 per dollar.

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