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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FX Daily, August 7: Three Asian Central Banks Surprise Investors

2019-08-07

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2019-08-07

While investors keep a watchful eye on the dollar fix in China (a little firmer than projected) and tensions with the US, two other developments compete for attention. The Reserve Bank of New Zealand and the central banks of India and Thailand surprised the market with lower rates. The RBNZ cut by 50 bp, India by 35 bp, and the fact that Thailand cut at all was unexpected.

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FX Daily, August 6: Markets Stabilize with Help of CNY Fix in Muted Turnaround Tuesday

2019-08-06

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2019-08-06

Overview: The escalation of the economic conflict between the world's two largest economies is dominating the capital markets.  The US cited China as a currency manipulator after the North American markets closed, ensuring the troubled start to Asian trading after the US equities and yields plummeted on Monday.  The VIX surged to 25%, doubling in the past week.

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Cool Video: The implication of CNY7.0+

2019-08-06

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2019-08-06

President Trump's tweets last week announcing the end of the tariff truce signaled a new phase in the US-Chinese tensions.  China responded as did investors.  I was fortunate to have been invited to the Bloomberg set to discuss the issues of the day.

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Calling China a Currency Manipulator Is a Toothless Move, Says Bannockburn’s Chandler

2019-08-06

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Aug.05 — Marc Chandler, chief market strategist at Bannockburn Global Forex, discusses the U.S. calling China a currency manipulator and China’s possible reaction. He speaks on “Bloomberg Markets: China Open.”

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Market Expects U.S. Retaliation, Escalation as Yuan Weakens: Chandler

2019-08-05

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Aug.05 — Marc Chandler, chief market strategist at Bannockburn Global Forex, discusses the market implications of China letting the yuan slip to its lowest level in more than a decade. He speaks with Bloomberg’s Caroline Hyde on “Bloomberg Surveillance.”

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FX Daily, August 5: China Strikes Back

2019-08-05

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2019-08-05

Overview:  Chinese officials took the US tariff hike quietly last week but struck back today.  The PBOC fixed the dollar higher (CNY6.90), which it has not done, and will halt imports of US agriculture. The dollar shot through CNY7.0 to finish the mainland session a little above CNY7.03 and CNH7.07 for the offshore yuan. 

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FX Weekly Preview: The Dog Days of August are Upon Us

2019-08-05

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2019-08-05

The die is cast. To defend the uneven expansion and ward off disinflationary forces, monetary authorities will provide more accommodation. The Federal Reserve delivered its first rate cut in more than a decade and stopped unwinding its balance sheet two months earlier than it previously indicated (worth $100 bln of additional buying of Treasuries and Agencies).

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August Monthly

2019-08-04

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2019-08-04

After falling against all the major currencies in June, the US dollar rebounded in July. The Dollar Index finished the month at new two-year highs with the Fed’s suggestion it was engaged in a mid-course correction rather than a sustained easing cycle. The dollar also appeared buoyed by the extent of the dovishness by the ECB and the heightened risks that the UK leaves the EU at the end of October without an agreement.

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Brexit Update

2019-08-03

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2019-08-03

The October 31 deadline for the UK to leave the EU is less than 100 days away.  The new Prime Minister is beginning to convince others that that UK will, in fact, leave at the end of October.   PredictIt.Org shows the odds of the UK leaving has risen to almost 50% from about a 33% chance a month ago.   Here is a summary of where the situation stands and some key dates going forward. 

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What’s the trade after Trump’s surprise China tariffs

2019-08-03

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Adam Button from Forexlive.com talks about the outlook for markets after US President Donald Trump shocked markets by announcing a 10% tariff on all untariffed Chinese goods effective Sept 1. Just minutes after the announcement, Button appears on BNNBloomberg to talk about what's next. Aired Aug 1, 2019.

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What’s the trade after Trump’s surprise China tariffs

2019-08-03

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Adam Button from Forexlive.com talks about the outlook for markets after US President Donald Trump shocked markets by announcing a 10% tariff on all untariffed Chinese goods effective Sept 1. Just minutes after the announcement, Button appears on BNNBloomberg to talk about what’s next. Aired Aug 1, 2019.

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FX Daily, August 2: End of Tariff Truce Trumps Jobs

2019-08-02

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2019-08-02

Overview: The market was finding its sea legs after being hit with wave and counter-wave following the FOMC decision, and more importantly, Powell's attempt to give insight into the Fed's thinking. Trump's tweet than signaled an end to the tariff truce with a 10% levy on the $300 bln of imports from China that have not been subject to action previously.

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FX Daily, August 1: Mid-Course Correction Sends Greenback Higher

2019-08-01

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2019-08-01

Overview:  The Federal Reserve delivered the first rate cut since the Great Financial Crisis but couched it in terms of a mid-course correction rather than the start of a larger easing cycle.  By doing so, Fed chief Powell cast the cut in less dovish terms than the market expected and the reaction function of the market has been clear. 

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FX Daily, July 31: Sterling Steadies, Attention Shifts to FOMC

2019-07-31

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2019-07-31

Overview: After a shellacking in recent days, sterling has stabilized though there is not much of a bounce to speak of, suggesting the adjustment to the risk of a no-deal Brexit may not be complete. After the S&P 500 posted back-to-back declines, Asia Pacific equities struggled. Hong Kong shares led the regional decline.

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FX Daily, July 30: Sterling Pounded

2019-07-30

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2019-07-30

Overview:  The prospect of a no-deal Brexit continues to pound sterling lower.  A little more than two months ago, it was testing $1.32.  Two weeks ago it was around $1.25.  Today it traded near $1.2120 before stabilizing.  On the other hand, the 10-year Gilt yield is below 65 bp, a new multiyear low, while the international-laden FTSE 100 is holding its own in the face of heavier equity prices in Europe.

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Uptick in site deposits puts the spotlight on SNB intervention in the franc

2019-07-29

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2019-07-29

SNB Sight Deposits Increased, 2016-2019
Has the SNB started to intervene. The weekly site deposit data from the Swiss National Bank showed a small uptick but with some perspective, it's a notable turn. Bloomberg highlights the bump and what looks like a bid to keep EUR/CHF above 1.10.

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FX Daily, July 29: Prospects of a No-Deal Brexit Weigh on Sterling

2019-07-29

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2019-07-29

Unrest in Hong Kong and disappointing earnings reports from South Korea weighed on local equity markets, and the MSCI Asia Pacific Index fell for the third consecutive session. European equities are edging higher in tentative trading. The Dow Jones Stoxx 600 is firmer for the sixth session of the past seven. US shares are little changed after record-high closes before the weekend.

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FX Weekly Preview: The FOMC and US Jobs Headline the Week Ahead

2019-07-29

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2019-07-29

There is little doubt that the Federal Reserve will ease monetary policy at the conclusion of the FOMC meeting on July 31. We never thought the chances of a 50 bp move were anything but negligible, though even at this late stage, the market appears to be pricing in about a one-in-five chance.

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Seven Points on the ECB and the Price Action

2019-07-27

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2019-07-27

Confusion
As soon as it was clear that the ECB was not easing today, the euro began to recover, after making a marginal new low for the year (just above $1.11). Draghi made it clear that easing was going to be delivered in September and on several fronts including rates (with mitigating measures like tiering) and new asset purchases (not decided on instruments, which plays into speculation of equity purchases—though I strongly doubt this will materialize).

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FX Daily, July 26: Markets Consolidate as the Dollar Index Extends its Advance for the Sixth Consecutive Session

2019-07-26

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2019-07-26

Investors are happy for the weekend. Between the ECB, Brexit, and next week's FOMC, BOJ, and BOE meetings, the markets are mostly in a consolidative mode ahead of the weekend. The first look at Q2 US GDP is the last important data point of the week, though it is unlikely to impact next week's Fed decision.

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