FOREX REPORT FOR 21 AUGUST 2014

MARKET HEADLINES
 

Dollar firm in Asia as Ukraine tensions ease
The dollar held steady in Asia on Tuesday as concerns over a Ukrainian clash with Russia eased, while investors looked to a speech by the US Federal Reserve chief this week. In midday Tokyo trade, the greenback rose to 102.62 yen, up from 102.57 yen in New York and 102.32 yen in Tokyo earlier Monday. The euro was weaker at $1.3351 from $1.3363, while it bought 137.04 yen against 137.05 yen in US trade. "There was a general easing of geopolitical tensions, with no new developments being good news in Ukraine and Gaza," National Australia Bank said in a note. The Japanese yen and Swiss franc, considered safe-haven currencies in times of turmoil, notched up gains Friday after Ukraine said it had destroyed some Russian armoured cars, sparking fears of an escalation. Moscow dismissed the claim. A weekend meeting of the two nations' foreign ministers, which also involved officials from France and Germany, concluded with an agreement for the sides to meet again and continue trying to de- escalate the worst East-West crisis since the Cold War. In the Gaza Strip, a new 24- hour ceasefire came into effect Tuesday after Israeli and Palestinian negotiators agreed to extend a five-day truce, minutes before a midnight deadline, to allow for further talks on a long-term deal. Later Tuesday, investors were looking to US inflation data for July to get a snapshot of the state of the world's number one economy. Federal Reserve Chair Janet Yellen is to deliver a keynote address at the central bank's annual economic conference this week, with investors eyeing any change in the timeline for raising interest rates.

New Zealand dollar slips to five-month low
The New Zealand dollar tumbled 0.3 per cent to $0.8389 on Wednesday, its lowest since early March as support gave way triggering stop-loss selling. The kiwi last traded at $0.8394, while it also gave ground against major currencies, with the Aussie dollar at a nine-month high of NZ$1.1082. The New Zealand dollar has been under pressure for the past month because of falling commodity prices, and the central bank's move to halt it rate tightening programme.

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