Salzworth Asset Management

04/05/2025

03/01/2023

Happy New Year to all our partners and investors!

We are proud to announce that Salzworth Asset Management (Salzworth Global Currency Fund) has ranked World number 1 in the Currency Traders Managing More Than $10M category, Short Term category, CTAs Managing More Than $10M category and Systematic Traders category for November 2022.

The war in Ukraine and Covid-19 situation have created a tough year of uncertainty for most asset classes and markets. Nonetheless our portfolio has remained resilient in the face of unprecedented headwinds thanks to the support of our loyal investors. We have achieved a stellar YTD performance of +23.95% (as of end Nov), and continue to pride ourselves in delivering steady, long-term wealth as always.

Contact us for further enquiries:
[email protected]

02/04/2022

Navigating 2022 through risk and uncertainty with FX

Recent geopolitical events have added to the amount of 'risk' events, rocking many asset classes and investment portfolios.

Salzworth FX Fund Manager Ashli Koe was recently invited to speak to a live audience at the Asia Risk Live 2022 - CIO Panel, where she shared some of the investment trends in the FX space as well as how her team's focus on disciplined risk management managed to successfully help clients navigate Q1's choppy waters; once again underscoring the importance of diversification amidst uncertainty.

Sharing the panel with her - James Cheo (HSBC), Gareth Nicholson (Nomura), Ram Gopalakrishnan (Affirma Capital) and Edris Boey (Maitri Asset Management).

26/01/2022

Weekly Technical Analysis Report 26 January 2022

1. Summary of last week's call on GBPJPY
On the H4 time frame, we are seeing bearish order flow come into play with prices forming lower lows and lower highs. A pullback to the resistance zone at 157.065, in line with the 78.6% Fibonacci retracement, 127.2% Fibonacci extension presents an opportunity to play the drop, with 153.564 support zone as our target. Ichimoku cloud is showing signs of bearish pressure as well.

2. Outlook on USDJPY: Bullish play seen
On the H4 time frame, prices are holding above the key support zone at 113.60 where we could see further upside above this level. On the H1 time frame, a pullback to our support area at 113.72, in line with the 61.8% Fibonacci retracement and 100% Fibonacci extension presents an opportunity to play the bounce to the next resistance target at 114.20, in line with the 50% Fibonacci retracement.

1. Last week’s outlook on GBPJPY: Pullback on GBPJPY presents an opportunity to play a further drop

24/01/2022

Weekly Market Update 21 January

1. The Dollar held steady around the 95.5 level at the end of last week, as investors are preparing for more hawkish signals from the Federal Reserve in its upcoming FOMC meeting. Last week, weekly jobless claims rose unexpectedly to 286 thousand claims, well above market expectations of only 220 thousand, revealing some virus-related disruptions impeding the recovery of the labor market. Furthermore, major U.S. stock indices such as the S&P 500 saw sharp declines at the end of last week following poor earnings results from companies that performed well during the pandemic. Moving forward, the Dollar is expected to see more strength as a safe-haven currency, amid equity sell-offs and heightened tensions around the world. The U.S. central bank is scheduled to meet on January 25th-26th, and general market consensus is that there is likely to be more hawkish signals coming from the Fed about tightening its monetary policy. While interest rates are not expected to be hiked just yet, policymakers have been providing strong hawkish comments, and Fed Chair Jerome Powell has also mentioned that the U.S. is ready for interest rate hikes this year. Investors will be watching the central bank meeting closely for any indications of a more hawkish tilt in its monetary policy moving forward.

2. The Euro traded at $1.135 near the end of last week, which was much lower than the recent two month-peak at $1.148 and followed a jump in yields over the past few days. Furthermore, the ZEW Economic Sentiment Index showed that consumer confidence remained at the lowest level since March 2021, possibly explaining the underperformance of the currency. The European Central Bank is expected to maintain its slow progress on tightening monetary policy, but investors expect an interest rate hike by December 2022. Going into the new week, flash PMI data from major countries in the European bloc such as Germany and France will be watched closely as a leading indicator of the health of Europe’s economy. Similarly, the Sterling underperformed against the greenback last week, trading at around $1.36 at the end of last week. The U.K. is currently experiencing a high level of inflation, with inflation rates rising more than expected to 5.4% in December and the core index, excluding volatile items, rising to 4.2%. Retail price inflation hit a new 30-year high, and factory price data also shows similar pressures. As such, the general consensus is that the Bank of England will be raising rates again in February to handle such inflationary pressures. Furthermore, Sterling could see further downside with rising political uncertainty. U.K. Prime Minister Boris Johnson and his party are facing calls to resign after admitting that he attended staff drinks during the May 2020 lockdown period. In the coming week, flash manufacturing and services PMI will be watched closely by investors for an indication on the health of the U.K. economy.

3. Commodity currencies underperformed for the week against the steady U.S. dollar leading up to the Federal Reserve meeting. The Aussie depreciated below $0.722 in the past week, down from a high of $0.7276 despite posting stronger-than-expected employment numbers. Going forward, CPI data is expected to be released next week to give a better idea of inflationary pressures in the Australian economy. The Reserve Bank of Australia is also due to meet on February 1st to decide whether to end its bond-buying programme early, as it continues to lag behind other economies in pulling back on its pandemic-era stimulus. The Kiwi also depreciated below $0.675 under similar pressure from the dollar, while the Canadian dollar held around $1.25 before the week ended, as investors shy away from riskier assets in the current climate. Elsewhere, crude oil prices rallied, buoyed by rising global political tensions in Russia and Middle East before retreating to about $85 per barrel, as increasing crude and fuel stockpiles helped to ease the tight supply outlook. Gold, on the other hand, is seeing some short-term upside, trading at $1,840 an ounce, supported by inflationary concerns, easing U.S. bond yields and increased demand for safe haven assets. Gold prices could continue to see limited upside in the short run, but investors are still cautious of any possible hawkish surprises in the upcoming Federal Reserve meeting.

1. The Dollar held steady around the 95.5 level at the end of last week, as investors are preparing for more hawkish signals from the Federal Reserve in its

19/01/2022

Weekly Technical Analysis Report 19 January 2022

1. Summary of last week's call on GBPJPY
On the daily time frame, prices mitigated a key resistance zone where we could see further downside below this level. On the M30 time frame, a pullback to the resistance zone at 157.606, in line with the 127.2% Fibonacci extension, presents an opportunity to sell with 156.755 as our support target. Stochastic is approaching resistance as well where we could see a reversal below this level.

2. Outlook on AUDUSD: Pullback on GBPJPY presents an opportunity to play a further drop
On the daily time frame, prices mitigated a key resistance zone where we could see further downside below this level. On the H4 time frame, we are seeing bearish order flow come into play with prices forming lower lows and lower highs. A pullback to the resistance zone at 157.065, in line with the 78.6% Fibonacci retracement, 127.2% Fibonacci extension presents an opportunity to play the drop, with 153.564 support zone as our target. Ichimoku cloud is showing signs of bearish pressure as well.

1. Last week’s outlook on GBPJPY: Bearish play seen

17/01/2022

Weekly Market Update 14 January

1. The Dollar suffered its biggest weekly loss in nearly eight months as it dipped to around 95 at the end of the week as investors began to unwind hawkish bets on the outlook of how interest rates may change in the coming months. Although the general consensus is that the U.S. Federal Reserve will hike rates three times this year, there are signs that the Fed may have to be more cautious. Latest data showed that retail sales unexpectedly declined by 1.9%, while industrial production in the U.S. saw a drop by 0.1% as opposed to market expectations of a 0.3% rise. Consumer sentiment also worsened in early January to its second-lowest level in the past 10 years, well below market expectations, indicating that markets may not be as optimistic about economic recovery as previously thought. Federal Reserve chair Jerome Powell also dashed expectations of more aggressive tightening of monetary policy in his Congressional testimony earlier last week. U.S. stocks were mixed. The S&P 500 was 0.1%, but the Dow Jones lost around 200 points, mostly weighed down by bank shares, where mixed earnings reports were posted by major banks in the U.S. Going forward, investors will be looking out for unemployment claims, existing home sales and the Philly Fed manufacturing index, for a better grasp of how economic recovery may progress, and how the Fed may adapt its monetary policy accordingly.

2. The Euro outperformed the Dollar and hit its highest level since mid-November 2021. This comes mostly amidst the weakening of the greenback over the week. Industrial production in the Eurozone climbed 2.3% last month, rebounding from three consecutive months of contraction and beating market expectations of 0.5% growth. However, moving forward, the ECB is not expected to change its much slower timeline of tightening monetary policy. In the coming week, ZEW economic sentiment survey is expected to reveal the general economic outlook. Similarly, the Pound also strengthened and outperformed the greenback, holding above $1.37 in mid-January which is its strongest level since October 2021. The Sterling is supported by strong GDP numbers in November and expectations of interest rate hikes by the Bank of England in February to tame inflation. Fears over the adverse impact of the Omicron variant on the British economy also eased. Moving forward, investors will be looking out for CPI data over the past year to have a better idea of inflationary pressures in the British economy. BOE Governor Bailey is also expected to testify before the Treasury Select Committee as well.

3. Commodity currencies also outperformed the Dollar over the week. Both the Aussie and the Kiwi gained 0.7% over the week. The Reserve Bank of Australia is not expected to hike rates until 2023, but the Reserve Bank of New Zealand is expected to tighten monetary policy further given a milder than expected third quarter economic contraction in New Zealand. The Canadian dollar also traded at its highest level since November 2021, amid a weaker U.S. dollar and higher oil prices, which stayed above $82 per barrel. WTI crude futures rose more than 2% in its fourth consecutive week of gains, amid supply disruptions in Libya and Kazakhstan and dwindling U.S. crude inventories. Gold, however, traded below $1,820 an ounce at the end of last week. Nevertheless, the bullion was on track for its best week since mid-November after Fed chair Jerome Powell dashed expectations of aggressive tightening in his Congressional testimony earlier this week. However, given expectations of upcoming rate hikes by the U.S. Federal Reserve, gold prices could suffer as the opportunity costs of holding a non-yielding asset like gold become higher with higher interest rates.

1. The Dollar suffered its biggest weekly loss in nearly eight months as it dipped to around 95 at the end of the week as investors began to unwind hawkish

12/01/2022

Weekly Technical Analysis Report 12 January 2022

1. Outlook on GBPJPY: Bearish play seen
On the daily time frame, prices mitigated a key resistance zone where we could see further downside below this level. On the M30 time frame, a pullback to the resistance zone at 157.606, in line with the 127.2% Fibonacci extension, presents an opportunity to sell with 156.755 as our support target. Stochastic is approaching resistance as well where we could see a reversal below this level.

1. This week’s outlook on GBPJPY: Bearish play seen

10/01/2022

2022 January Outlook for G7 Currencies

Euro and Pound Fundamentals

Bearish Euro and Pound: Euro held at about $1.13 and the Sterling held at around the $1.35 level to start off the new year in January 2022. Going forward, given the strength of the dollar, the euro and pound could still see pressure against the greenback. The U.S. Federal Reserve is expected hike interest rates as early as March 2022 in order to curb inflationary pressures and in response to an improving labour market.

ECB maintains dovish stance: The European Central Bank is set to hold interest rates near record-low levels in 2022, maintaining a dovish stance on monetary policy despite progress being made on economic recovery. In comparison to other central banks around the world, the ECB is seen to be much slower in tightening its monetary policy in pursuit of its medium-term inflation target.

Possible improvement in Britain’s market sentiment: Market sentiment could be improving in the U.K., as seen by the unexpected rate hikes in December 2021 and the refusal from the government to tighten restrictions in response to the rapid spread of the Omicron variant. However, this positive sentiment could still be contested by slowing economic recovery, mounting inflationary pressures, rising COVID-19 cases and post-Brexit tensions.

Find out more in the link below:

Euro and Pound

10/01/2022

Weekly Technical Analysis Report 7 January 2022

1. Summary of last week's call on NZDUSD
On the H4 time frame, prices are testing a key resistance area. On the M30 time frame, a pullback to the resistance zone at 0.68500, in line with the 78.6% Fibonacci retracement presents an opportunity to sell to the next support target at 0.68200. Ichimoku cloud and 30 EMA are showing signs of bearish pressure as well. A break below the 0.68200 area could see prices push lower to the next support target at 0.68050.

2. Outlook on AUDUSD: Bearish play seen
On the daily time frame, prices are currently testing a key supply zone where we could see further downside below the supply zone . On the H2 time frame, a pullback to the resistance area , in line with the 50% fibonacci retracement and 78.6% Fibonacci extension presents an opportunity to play the drop to the next support target at 0.70902. Ichimoku cloud is showing signs of bearish bias as well.

1. Last week’s outlook on NZDUSD: Pullback presents an opportunity to sell

10/01/2022

Weekly Market Update 7 January

1. The Dollar dropped below 96 but held steady throughout the week even with the disappointing nonfarm payroll results. Although nonfarm payrolls increased only 199,000 in December, well below market expectations of 400,000, the unemployment rate decreased more than expected to 3.9% and wage growth was encouraging as well, with hourly wages gaining 4.7% from a year ago. The U.S. stock market traded with mixed sentiment on Friday. Investors will be looking out for CPI and retail sales data for a better gauge on inflation and the general performance of the U.S. economy. Fed Chair Jerome Powell is also scheduled to testify on Tuesday.

2. The Euro held near $1.13 in early January, staying close to a 17-month low of $1.12 hit last November. Eurozone consumer confidence was confirmed to be at -8.3 in December 2021, which is its lowest level since March of the same year. The ECB is likely to continue holding interest rates at record-low levels as announced to support the economic growth in the bloc amidst poor sentiment due to rising COVID-19 cases and surging prices. ECB President Christine Lagarde is speaking late next week, and investors will be looking out for any shifts in stance on its monetary policy. On the other hand, the Pound outperformed its peers over the week, holding above $1.35 in early January, amidst expectations that the Bank of England may be raising rates as early as February. However, slowing economic recovery, record-high number of COVID-19 cases and post-Brexit tensions over the Northern Ireland protocol could dampen the positive sentiment in the U.K. going forward.

3. Commodity currencies continued to underperform against the greenback throughout the week, as investors digested the hawkish stance that the U.S. Federal Reserve took in their latest policy meeting minutes. The Aussie held below $0.718, ending the week almost 1% lower. The Reserve Bank of Australia continues to hold its stance on not hiking domestic rates until 2023, but investors will be looking out for the meeting on February 1st, where the RBA could decide to end its bond-buying programme early. The Kiwi performed similarly, holding below $0.677, about 1% lower over the week. Investors widely expect the Reserve Bank of New Zealand to hike rates yet again to 1.0% at its February meeting amid persistent inflation and low unemployment. WTI crude futures are headed for its third weekly advance, trading at around $80 per barrel on Friday. Gold is still on track for a 2% weekly drop against market consensus of earlier and faster interest rate hikes. Higher interest rates increase the opportunity costs of holding a non-yielding asset like bullion, thus possibly causing gold to lose its lustre going forward.

1. The Dollar dropped below 96 but held steady throughout the week even with the disappointing nonfarm payroll results. Although nonfarm payrolls increased

03/01/2022

Weekly Market Update 31 December

1. The Dollar hovered around the 96 level at the end of December, which is its closest level in the past 4 weeks. Yet, the U.S. dollar is set to gain 7% over the past year, which is its largest gain since 2015. This comes amid expectations that the Federal Reserve will be tightening monetary policy much faster than other central banks given that the U.S. economic recovery has been strong and robust, with prospects of three interest rate hikes in 2022. Stepping into 2022, investors will be watching out for the FOMC meeting minutes on Wednesday for further insights into Fed’s first interest rate hike. In addition, investors will await the first release of nonfarm payrolls in 2022 at the end of the week to gain a better understanding of the U.S. labour market, which has been steadily recovering.

2. The Euro appreciated against the greenback in the last week of 2021, but remained under pressure amid concerns over Europe’s slowing economic growth and re-emergence of COVID-19 restrictions across several countries. Moving forward, the Euro is likely to weaken against the dollar until economic growth picks up again in 2022. For the coming week, final services PMI data will be released for several countries in the European bloc. Similarly, the pound appreciated against the dollar at the end of 2021, but remained weak against the greenback, against which it is set for an annual loss of 1.5%. Going into the week, investors will be looking out for final services PMI and the Halifax HPI which will be released near the end of the week.

3. The Aussie appreciated against the greenback in the last week of 2021, gaining 0.25% over the week. The Reserve Bank of Australia maintained its position to keep interest rates low in 2022 along with its ultra-loose monetary policy until inflation is sustainably within the 2-3% range. The Kiwi, however, depreciated against the U.S. Dollar, falling to $0.685 at the end of 2021 on the back of a stronger Dollar, amid expectations of higher U.S. interest rates. The Canadian dollar outperformed most of the major currencies such as the Euro, Pound and Yen, corresponding with the strong annual performance of crude oil prices. Gold held at about $1,830 per ounce at the year’s end. Annually, gold prices saw a 4% decline, as strong post-pandemic economic recovery and inflationary pressures prompted many major central banks to tighten its monetary policy much sooner , thereby dampening the appeal of the non-yielding asset.

1. The Dollar hovered around the 96 level at the end of December, which is its closest level in the past 4 weeks. Yet, the U.S. dollar is set to gain 7% over