Category Archive: 4) FX Trends

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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(5.5) FX Theory: Currencies of Countries with High Economic Freedom, Immigration and Savings Must Appreciate

Economic freedom, immigration and high savings are main drivers for strong currencies. Switzerland, Singapore, Norway, Sweden and in the future even Germany are examples. Strangely most are in Europe.

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(5.6) The Holy Grail of Long-Term Currency Movements: Crowther’s Balances and Imbalances of Payments

The former chief editor of "The Economist" Geoffrey Crowther published a great work on the development of balance of payments and current accounts over the long-term. It divides development into six phases, which are analogous to Shakespeare's seven phases of life. The seven stages are: Young debtor nation, Mature debtor nation, Debt repayment nation, Young creditor nation, Mature creditor nation, Credit disposition /Asset Liquidation nation and...

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(6) FX Theory: Carry Trade and Reverse Carry Trade

This page discusses two closely related concepts: the carry trade and the reverse carry trade.

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(6.1) FX Theory: The relationship between Current Accounts Surpluses and the Carry Trade

The EUR/USD is going on its longest winning streak for a long time. Since May 27, it has improved from 1.2850 to 1.3396 and is approaching 1.34. What are the reasons?

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(6.2) The Ultimate Carry Trade: U.S. Banks Buying Treasuries

The Asset Market Model implies that a currency will be in higher demand and should appreciate in value, if the flow of funds into financial market of the country such as equity and bonds markets increase.

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(8) Currency Wars: How to Push and Talk Down Your Currency?

Direct or indirect intervention is credible only in countries where domestic asset prices are undervalued and CPI/asset price inflation are no issues. Otherwise they create medium-term risks.

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(9) FX Theory: Wealth and Net International Investment Position

Availability of funds (wealth and the international investment position): One of the 5 key indicators for FX rates. Often currencies of countries with a a lot of funds appreciate when markets decline.

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(9.1) Net International Investment Position

Net International Investment Position IMF

A comparison of the net international investment position (NIIP) of several countries. We explain why asset valuation effects this position at the example of the United States.

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(8.1) Yen Weakness: Risk-Off Environment, Abenomics or Trade Deficit?

The yen overshot during and after the financial crisis. The USD/JPY fell from 120 in 2008 to lowest levels of 74, by 62%, but rose to 102 again. What are the reasons?

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(12) FX Rates, Contrarian Investments and the Misleading Concept Called GDP

We extended our existing post to contrarian investing. It was published on Seeking Alpha and awarded the Editor's Pick. Gross Domestic Product(ion) is (or has become) a measurement of activity and consumption, but not of capital accumulation and production. In many cases, GDP growth is negatively correlated to saving. Higher savings (aka austerity) leads to lower GDP growth today, but to higher GDP in the future. In its worst case, GDP growth...

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(14) Best Trading Tips

Read our contrarian insights: We provide regularly contrarian indications to technical Forex movements. Trade after work and do not look at markets during the day, third read scary facts about stops.

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(13.1) Is the Swedish Krona a Safe-Haven?

Arguments in favor of and against the Swedish Krona,as safe-haven during the euros crisis. Extracts from tradingfloor.com

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(10.1.1) Net International Investment Position United Kingdom

We discuss the net international investment position of the United Kingdom

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Currency Positioning and Technical Outlook August 12: Corrective Pressures Dominate

2013-08-12

by George Dorgan

2013-08-12

Submitted by Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman The main tension in the foreign exchange market is between positions adjusting pressures, which are US dollar negative, and widely held ideas that the trajectory of growth and interest rate differentials favor the US, which is dollar positive. There are some important economic data due …

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Net Speculative Position and Technical Outlook: A Week of Fundamentals

2013-07-29

by Marc Chandler

2013-07-29

Submitted by Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman Fundamental considerations are likely to dominate technical factors in the week ahead. The Federal Reserve, Bank of England and the European Central Bank meet. The PMIs are released. The first estimate of Q2 US GDP, July auto sales and the monthly employment will also be …

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Currency Positioning and Technical Outlook: Dollar Correction at Hand?

2013-03-26

by Marc Chandler

2013-03-26

Submitted by Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman The US dollar rose against all the major currencies in the past week. It seems clear that the greenback’s gains were not a reflection of domestic developments, though it is true that US data stands in stark contrast with nearly every other major country. …

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Net Speculative Positions, Technical Forecast, Week March 04: King Dollar Returns?

2013-03-05

by Marc Chandler

2013-03-05

Net Speculative Positions, Technical Forecast, Week February 17

2013-02-18

by Marc Chandler

2013-02-18

Submitted by Mark Chandler, from marctomarkets.com The official talk around the G7 statement and the G20 meeting generated a great deal of needless noise in the foreign exchange room. It is almost like a librarian yelling “Quiet”. It may be more disruptive than the initial noise. With the meetings out of the way, we expect …

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Net Speculative Positions, Technical Forecast, Week February9

2013-02-12

by George Dorgan

2013-02-12

Submitted by Mark Chandler, from marctomarkets.com Last week the euro was the weakest of the major currencies and the recently beaten up sterling and yen were the strongest. A similar pattern was also evident in the dollar-bloc. The New Zealand dollar had been the strongest and last week had was the weakest, with the …

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