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.
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Chart up-date: Stocks, Bonds, Copper, Gold

2016-06-10

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2016-06-10

Well that escalated quickly...All-time highs within reach... everything is awesome...wait what... Quite a week: Gold +5.25% in last 2 weeks - best run in 4 months Silver +5.65% this week - best week since May 2015 Copper -4% this week to lowest week...

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Politics and Economics

2016-06-10

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2016-06-10

Many people understand politics and economics to be two different disciplines. I remember in graduate school more than two decades ago, many colleagues and professors operationally defined political economy as how politics, by which they meant the state, screws up economics. I spoke at the Fixed Income Leaders Summit earlier this week and teased that many seemed …

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FX Daily, June 9: Greenback is Mostly Firmer, but Yen is Firmer Still

2016-06-10

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2016-06-10

The euro continues to weaken against the franc at 1.0922. But the speed of the descent has slowed. The dollar is stronger, in particular against EUR, CHF and AUD. The US dollar is posting modest upticks against most of the European currencies and the Canadian and Australian dollars. However, it has fallen against the yen and taken out the recent low, leaving little between it and the May 3 l...

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FX Daily, June 8: Currencies Broadly Stable, but Greenback is Vulnerable

2016-06-09

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2016-06-09

Once again the Swiss Franc appreciates both against EUR and USD. The euro topped at 1.1095 shortly before the US payroll data and has fallen to 1.0932. The dollar has fallen from 0.9947 to 0.9596. The foreign exchange market is quiet.  The euro remains confined to the narrow range seen on Monday between $1.1325 and $1.1395.  We continue to look for higher levels near-term as the drop from May 3 (~$1.1615) to May 30 (just be...

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Cool Video: Bloomberg Television–All about the Periphery

2016-06-09

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2016-06-09

I am in Boston to attend the Fixed Income Leaders Summit and was invited to join Alix Steel, Joe Weisenthal, and Scarlet Fu on Bloomberg TV.   We talked about the peripheral in Europe, especially Portugal, Italy and Spain. Each has a pressing issue.  In Portugal, yields have not fallen as much as in other … Continue reading »

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Presidential Elections and Fed Policy: How Close is Close?

2016-06-09

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2016-06-09

The most important element in next week’s FOMC meeting may come from the dot plot and whether Fed officials back away from the two hikes thought appropriate in March. When looking the schedule of FOMC meetings, and understanding that when the Fed says “gradual” to describe the normalization process, it does not mean hiking at …

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Great Graphic: Despite Higher Oil Prices, Middle East Pegs Remain Under Pressure

2016-06-08

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2016-06-08

With today’s gains, the price of Brent has nearly doubled from its lows in January. Of course, the price of oil is still less than half of levels that prevailed two years ago.  At the same time, many leveraged investors cast a jaundiced eye toward currency pegs.  Many have concluded that the Middle East currency pegs …

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Swiss Reserves: Not what They Seem

2016-06-08

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2016-06-08

SNB Currency Allocation 2016
This posts shows again the stupidity of the financial media, that mixes up assets and liabilities for central banks. SNB FX reserves are assets. They are in different foreign currencies and subject to the valuation effect of these currencies.

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FX Daily, June7: Another Breakdown of EUR/CHF

2016-06-07

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2016-06-07

Once again both EUR and USD broke down against the franc. The adverse effect of the Friday US jobs reports is visible again. Moreover, CHF appreciated with the Asian block, with AUD and NZD and with the oil price.

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Great Graphic: Brexit Risks Rise

2016-06-06

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2016-06-06

Brexit Predict This Great Graphic shows the price people are willing to pay to bet that the UK votes to leave the EU at the June 23 referendum on the PredictIt events markets.   We included the lower chart to give some sense of volume of activity on this wager in this event market. Presently, one … Continue reading »

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FAQ: ECB’s Corporate Bond Buying Program Starts

2016-06-06

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2016-06-06

In March, the ECB decided to increase its asset purchases from 60 to 80 bln euros a month and to include corporate bonds.  The corporate bond buying program begins this week.   We use an FAQ format to discuss the key issues. What is the ECB doing?   The ECB will buy euro-denominated, investment grade bonds … Continue reading...

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FX Daily, June 6: Shallow Bounce in Dollar, though Sterling Pressured by Brexit Polls

2016-06-06

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2016-06-06

With the dismal jobs reports,  speculators had to buy euro to cover their shorts (mostly against USD, but also against CHF). This led to a rising EUR/CHF on Friday. Today fundamental rules were valid again: In times of slow growth, the Swiss franc appreciates. Hence EUR/CHF was down by 49 bips.     After the …

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Emerging Markets: Preview of the Week Ahead

2016-06-06

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2016-06-06

Russian central bank meets Friday and is expected to keep rates steady at 11.0%.  However, the market is split.  Of the 25 analysts polled by Bloomberg, 13 see no move and 12 see a 50 bp cut to 10.5%.  The central bank has been on hold since the last...

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FX Weekly Preview: Macro Developments Will Not Stand in Way of Dollar Move Lower

2016-06-05

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2016-06-05

Through the first part of the year, the swinging pendulum of expectations for the trajectory of Fed policy has been a major driver in the foreign exchange market.  This is true even though the ECB and BOJ continue to ease monetary policy aggressively.   The Australian and New Zealand dollars appear to influenced more by the … Continue...

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FX Weekly Review May 30 to June 3: Dollar’s Rally Ends with a Bang

2016-06-05

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2016-06-05

The dollar peaked on May 30, but it was not clear until the poor US jobs report sent the greenback reeling on June 3. The EUR/CHF surprisingly increased, despite weak US data. No wonder, speculators had to cover their short EUR positions.

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Weekly Speculative Positions: Little Adjustment ahead of ECB and US Jobs

2016-06-04

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2016-06-04

The Swiss Franc net position was reduced from 4.0 contracts long to 0.1 thousand contracts long. Apart from the yen., other speculative position barely changed. We are keen on next week's data that should reflect the dismal US jobs report.

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Emerging Markets: What has Changed

2016-06-04

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2016-06-04

Local press is reporting that RBI Governor Rajan does not want to serve another term The incoming Philippine government is signaling looser fiscal policies ahead

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FX Daily, June 3: FX Market Shocked by Non-Farm Payrolls

2016-06-04

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2016-06-04

Massive surprise in the US job report was reflected in currency rates. The EUR/CHF surprisingly increased, despite weak US data. This reflects the fact that the ECB is currently considered the most dovish central bank. The dollar lost 2% against the yen, 1.6% against the euro and 1.3% vs. the Swiss franc.

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Three Political Events before the UK Referendum

2016-06-03

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2016-06-03

“Every thinking person in America is  going to vote for you Governor Stevenson,” said an enthusiastic voter. “I am afraid that won’t do.  I need a majority,” reportedly quipped Stevenson (1952 or 1956).   The UK referendum on June 23 is the most important political event of the first half of the year.  A decision to …

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FX Daily, June 2: Greenback Mostly Softer Ahead of ECB and ADP

2016-06-02

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2016-06-02

The US dollar remains under pressure.  It is off for the third day against the yen and slipped below JPY109 for the first time in a little more than two weeks.  The Nikkei struggled to cope with the foreign exchange developments, lost 2.3%, the most in a month, after gapping lower.  At JPY108.50, the dollar would … Continue reading...

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