Japanese yen and Chinese renminbi both up

Asian markets rallied overnight as the US dollar’s bullish surge eased off. The Chinese offshore yuan gained over 2% since Wednesday following government intervention to support the currency. The Japanese yen also gained overnight, pushing the Nikkei 225 down 0.4%. The US markets appear to be entering a period of uncertainty prior to President Trump’s inauguration and we may see some more assertive financial decisions from Beijing over the next few weeks. Mainland indices slipped in value but the Hang Seng was up 0.13% and the ASX200 posted small gains.

US employment figures due today

US markets and currency traders around the world are waiting for this afternoon’s NFP figures. Early indications are that employment grew at the end of the year and that wages rose, but the actual figures have surprised analysts before now. If employment data for December 2016 is weaker than expected, it will almost certainly push the greenback down further, raising more questions about the underlying state of the US economy. We could see the Trump bubble further punctured if the markets respond negatively to today’s numbers. Either way, the dollar is likely to be volatile from 13:00 GMT and we may see a compensatory change in gold prices.

Other market news

The Dow Jones Industrial Average fell yesterday as investors pulled out of blue chips in favour of gold and treasury bonds. Other major US indices may be under pressure today if investor confidence continues to be shaky. The British pound remained largely stagnant despite improved UK economic data. The markets are continuing to worry as the Brexit timetable tightens and we may not see a major rise in sterling until Q3 at the earliest. Bitcoin crashed 23% after pushing a record high on Wednesday. It is likely that bitcoin traders were watching the rising yuan and chose to take their profits. The euro climbed back 1.1% against the dollar but many commentators are still expecting a long-term drop. Oil prices remained fairly stable with projected production cuts failing to convince traders just yet.