Euro and Russian ruble continue to rise sharply, yuan is at 6-month low, gold price falls deeply

Expectations that French President Emmanuel Macron will win re-election on Sunday also support the euro.


Joachim Nagel, president of Germany’s Bundesbank, joined the “chorus” of policymakers in favor of a possible ECB rate hike as early as the third quarter of 2022.


Money markets, which had already reduced expectations for a rate hike by the ECB after its meeting on Thursday (April 14), are now betting that the ECB will raise rates by 20 basis points next week. July, and raise interest rates by a total of 70 points by the end of this year.


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If so, the ECB’s reference rate will rise above zero for the first time since 2013.


“More ‘hawkish’ comments from ECB officials are expected over the next few weeks, raising the possibility that this year’s key interest rate will see three hikes, 25 basis points each. That could support the euro towards $1.1. However, differences in monetary policy in general (of central banks around the world) and between the ECB and the Fed continue to exert pressure. bearish for the euro,” said Shaun Osborne, currency strategist at Scotiabank.


Political news in Europe also supported the euro’s gains in the past session, as French President Emmanuel Macron overcame a major hurdle ahead of a decisive election on Sunday (April 24). , with his dramatic debate with far-right candidate Marine Le Pen.


With only a few days left until polling day, 59% of those watching the debate thought Mr Macron was the most convincing in the debate, according to a quick poll by BFM TV, showing Mr. sees Macron’s 10-point lead in previous polls remaining fairly solid.


“There doesn’t appear to be anything out of the debate that could change the direction of the election’s outcome,” wrote Deutsche Bank analyst Jim Reid.


The euro in the April 21 trading session sometimes increased to $ 1,093, the highest since April 11, at the end of April 21, Vietnam time still increased 0.2% to $ 1.0874.


The pound also fell to a 10-day low against the euro as investors focused on the future monetary policy lines of the Bank of England and other major central banks. Against the British pound, the euro ended April 21 in Vietnam time increased 0.2 percent to 83.21 pence.


During the session, the euro appreciated against most other major currencies, such as the Japanese yen, Swiss franc and Norwegian crown.


However, Antje Praefcke, an analyst with Commerzbank, warned that the euro could face downward pressure if the US Federal Reserve (Fed) raises interest rates earlier and stronger than expected.


Investors are also awaiting new policy updates from the three big players in the central banking world: Bank of England Governor Andrew Bailey, ECB President Christine Lagarde and Fed Chair Jerome Powell , at the meeting of the IMF.


The Dollar index – which compares the USD with a basket of key partner currencies – ended April 21 in Vietnam time down 0.1% to 100.25.


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The Russian ruble continued to rise to 76 RUB/USD, ending April 21 up 0.3% to 76.22 RUB, fluctuating around the level before February 24. Against the euro, the Russian ruble fell 1.2% to 82.87 rubles as the euro strengthened.


However, trading activity remains down from pre-February 24 levels, while the ruble’s movement is constrained by capital controls, which have been in place since late February.


The Governor of the Central Bank of Russia, Elvira Nabiullina, said on April 21 that the task of the bank is to limit the volatility of the ruble. The bank imposed foreign exchange controls as it incapacitated the ruble’s support through foreign exchange interventions after Western sanctions froze nearly half of its reserves. this country.


China’s yuan fell sharply in the last session, to a 6-month low, as the dollar was supported by the Fed’s monetary tightening policy, which widened the yield gap between the two leading economies. The world is shrinking and China’s economic growth is forecast to slow down.


The yuan on the domestic market ended April 21 down 188 pips to 6.4388 CNY/USD. On the offshore market, the yuan also fell 0.4% to 6,469 CNH on the London exchange, the lowest level since September.


In the crypto market, Bitcoin experienced a volatile session as it rallied strongly towards the end of the session, but ended the session falling back to around $42,000. Even so, this coin still gained slightly in the past session.


In precious metals, gold fell 1% to a two-week low as US Treasury yields rose and riskier demand also picked up as investors awaited Fed tightening. monetary policy.


Spot gold price at the end of April 21 in Vietnam time decreased 1% to 1,937.99 USD/ounce; previously hit the lowest level since April 8. Gold futures for June also fell 0.6 percent to $1,943.


Bart Melek, head of commodity strategy at TD Securities, said gold is seeing a price correction as the market is expecting the Fed to be more aggressive in raising interest rates, while yields are also slowing. is increasing.


References: Refinitiv, Coindesk

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