The US Dollar climbs toward 101.6 as risk-off sentiment hits Asian markets, with investors eyeing today's nonfarm payrolls data for signs of continued Fed tightening.
Safe-haven demand from the tech-led equity selloff has lifted the Dollar, with the DXY rising towards 101.6. Stronger-than-expected JOLTS and ADP data point to solid US labour demand, and today's NFP report (consensus 70k vs 29k in September) could reinforce expectations of further Fed tightening, supporting the Dollar further.
Investors are seeking safe-haven assets amid a tech-driven equity selloff, and strong US labour data (JOLTS, ADP) raises expectations of further Fed tightening, both of which support the Dollar.
MUFG flags TWD as a tech-sensitive currency most exposed to the sharp deterioration in risk sentiment from the tech-led equity selloff. The relief from lower oil prices and US yields is expected to be outweighed by risk-off pressure, and a strong NFP print today would add further pressure.
Taiwan's currency is highly sensitive to the technology sector, so the tech-driven equity selloff and deteriorating risk sentiment weigh on it more than on other Asian currencies.
MUFG singles out KRW alongside TWD as a tech-sensitive currency that will feel the brunt of the risk-off episode, with the deterioration in risk sentiment threatening to outweigh relief from lower oil prices and US yields. Upcoming US payroll data adds another source of pressure.
A softer-than-expected US nonfarm payrolls report or a stabilisation in tech equities would ease the risk-off pressure on the Won.
Safe-haven demand amid the risk-off episode has lifted the Japanese Yen alongside the Dollar. As long as the tech-led equity selloff persists, the Yen should retain this support, though it is not cited with specific levels or figures.
Yes, the article notes safe-haven demand has lifted the Japanese Yen alongside the Dollar during the risk-off episode.
The US Dollar and Japanese Yen are gaining as safe-haven demand surges following a sharp tech-led equity selloff. Analysts at MUFG warn that tech-sensitive currencies like the Taiwan Dollar and South Korean Won face significant pressure ahead of today's US nonfarm payrolls report. Markets are bracing for a potential 70k job increase, which could fuel further Federal Reserve tightening expectations.
The Dollar is benefiting from safe-haven demand triggered by a tech-led equity selloff and expectations of further Federal Reserve tightening following robust US labor data.
The Taiwan Dollar (TWD) and South Korean Won (KRW) are identified as the most vulnerable due to their high sensitivity to the technology sector.