Category Archive: 4) FX Trends

Main Author Marc Chandler
Marc Chandler
He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.

FX Daily, April 19: Holiday Note

Many financial centers are closed today. These include Australia, India, most European markets, and the US. In Asia, equity markets that were open moved higher. The Nikkei, which gapped higher on Monday, rose 0.5% today for a 1.5% gain on the week. China's Shanghai Composite rose 0.6%, lifting the weekly increase to 2.6%.

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FX Daily, April 18: EMU Disappointment Lifts the Dollar

Overview: A bout of profit-taking in equities began in the US yesterday and has carried through Asia and Europe today. The MSCI Asia Pacific Index fell for the first time in five days, while the Dow Jones Stoxx 600 is snapping a six-day advance.  The Nikkei gapped higher to start the week and a gap low tomorrow would undermine the technical outlook.

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Pound to Swiss Franc rates: UK housing price growth hits 6 year low

We have seen a fairly stagnant market following the Brexit extension until 31st October. Although a key factor on GBP/CHF economic date releases will now gain back some of their impact. Yesterday saw the ease of House Price Growth data and figures dropped to a six year low. The average house price of across the UK grew by 0.6%, but property prices in the capital fell by 3.8%.

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FX Daily, April 17: Veracity of Chinese Data Questioned, but Lifts Sentiment Nevertheless

The veracity of Chinese data will be questioned by economists, but today's upbeat reports round out a picture that began with stronger exports and a surge in lending. Chinese officials, we argue, had a "Draghi moment" and decided to do "whatever it takes" to strengthen the economy in the face of US tariffs and during the 70th anniversary of the Revolution.

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Cool Video: Trump Ahead in 2020?

First, I tried playing down the significance of Goldman's call. The markets have anticipated this. redictIt.Org has shown the President to be an easy favorite since the start of the year. Charles Payne, the host, dismissed these results because he said they reflect professional gambler. I don't know if that is true or even relevant (ad hominem?).

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FX Daily, April 16: The Dollar and Stocks Catch a Bid

Amid light news, global equities are moving higher In Asia, the Nikkei rose to a new high since early December, while the Shanghai Composite rose 2.3% and posted its highest close since March 2018. European equities are solid, with the Dow Jones Stoxx 600 moving higher for the fifth consecutive session.

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FX Daily, April 15: Redemption Monday

The holiday-shortened week is off to a slow, tentative start. The surge of the S&P 500 before the weekend failed to inspire today. Asia markets were mostly firmer, led by Japan, while China, Hong Kong, and Singapore moved lower.

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FX Weekly Preview: Dollar Super Cycle Revisited

In the big picture, we argue that the dollar’s appreciation is part of the third significant dollar rally since the end of Bretton Woods. The first was the Reagan-Volcker dollar rally, spurred by a policy mix of tight monetary and loose fiscal policies.

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FX Daily, April 12: Euro Bid Above $1.13 for the First Time this Month

Overview:  The consolidative week in the capital markets is drawing to a close.  Equity markets are narrowly mixed.  In Asia, most indices outside of the greater China (China, Taiwan, and Hong Kong) edged higher, leaving the MSCI Asia Pacific Index slightly lower on the week.  The MSCI Emerging Markets Index snapped a ten-day rally yesterday and is little changed so far today. 

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FX Daily, April 11: Market Yawns at Latest Brexit Extension

The S&P 500 closed higher yesterday for the ninth session in the past ten, but the coattails are short and global equities are trading with a heavier bias today. A firm CPI reading in China took a toll local shares with the Shanghai Composite, shedding 1.6%, the most in more than two weeks. European bourses are mostly in the red.

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FX Daily, April 10: Be Careful What You Wish For

There were only a few formal disputes under NAFTA 1.0. It says more about the adjudication process than the underlying issues. It was not binding. The Democrats want stronger enforcement provisions in what the NAFTA 2.0. It is understandable. Still, without opening up the agreement, which had been already agreed to by three heads of state, it is difficult to see how this will happen.

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FX Daily, April 09: Is the USMCA Dead?

The heads of state may have agreed on the modernization of NAFTA, but the necessary legislative approval may not be forthcoming this year. The US legislative process has been complicated by the fact that the Democrats secured a majority in the House of Representatives last year.

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Pound to Swiss Franc forecast: Will the GBP/CHF rate drop below 1.30?

There is a very strong likelihood that the pound to Swiss franc exchange rate might slip should Theresa May find herself in trickier waters ahead as she attempts to negotiate an extension on the Brexit deadline this week. Pound to Swiss franc exchange rates could easily slip below 1.30, particularly since the Franc is a safe haven currency that can strengthen in times of economic uncertainty.

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FX Daily, April 8: Brexit, the EU-China, and the Abandonment of the Open Door

(I am in Mexico at the World Trade Center General Assembly, participating on a panel about USMCA--NAFTA2.0--for which approval remains elusive.  It is possible that the US threatens to pull out of NAFTA 1.0 to force action by the US Congress.  Mexico is due to pass legislation this week that may meet demands by the some in the US and Canada for stronger labor protections.

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FX Weekly Preview: Important Steps Away from the Abyss

It seems to be well appreciated among by policymakers and investors that the system is ill-prepared to cope with another financial crisis. It is understandable that so many are concerned that the end of the business cycle could trigger a financial crisis. In practice, it seems like it has worked the other way around. The financial crisis triggered the Great Recession.

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FX Daily, April 05: Trade Talk and German Industrial Output Lifts Sentiment

Overview:  Comments by Chinese President Xi, recognizing substantial progress in trade, helped boost sentiment after the US-China negotiators failed to set a date for the meeting between the two presidents.  Although we have argued that the German economy may be past the worst, the sharp drop in factory orders spooked investors.

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FX Daily, April 04: Limited Price Action Does not Do Justice to Macro Developments

Overview: The global capital markets are subdued despite several macro developments.  The US and China may announce as early as today when the two presidents will meet to ostensibly sign a trade deal, while House of Commons effort to block a no-deal exit goes to the House of Lords today.  India cut interest rates by 25 bp, the second consecutive cut. 

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FX Daily, April 03: Optimism Sweeps Through the Capital Markets

Overview: Japan announced the name of the new era that begins May 1 and a new emperor.  The connotation is of beautiful harmony.  And investors have taken the bit and run with it.  Optimism that the US and China near reaching an agreement on trade. China and Europe have reported better than expected PMIs today. 

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Cool Video: Fed’s Independence Challenged and Defended

I was on the set Fox Business set this afternoon talking with Charles Payne and Quincy Krosby about Fed policy. Payne suggested that both the political left and right are trying to politicize the Federal Reserve to print money for their favorite programs.

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FX Daily, April 02: Herding Cats

After surging yesterday, equities are struggling to maintain the momentum that carried that S&P 500 to its best level since last October. Most Asia Pacific equity markets advanced. Japan's small losses were a notable exception. The Dow Jones Stoxx 600 has advanced in four of the last five sessions and is little changed, while US shares are trading with a heavier bias.

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