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.

The Future is Already Here–It is Just Not Evenly Distributed

When William Gibson would say that "the future is already here-it is just not evenly distributed," he was referring to how wealth and location determine one's access to technological advances (the future). Yet it equally can apply to the US-Chinese relationship.

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Fed Sticks To Script, Enjoys the Sweet Spot

The Federal Reserve kept policy on hold, and its sparse statement gave little clue as to what it makes of the pressures in the money markets or the weakness in the housing market.  The effective Fed funds rate is bumping against the cap provided by the interest rate on reserves.  Some repo rates, like SOFR (the intended replacement for LIBOR), have on occasion poked above what should be the ceiling.

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This is the great China watershed

Adam Button from ForexLive.com talks about why the trade war between China and the United States may only be the beginning. LET’S CONNECT! Facebook ► http://facebook.com/forexlive Twitter ► https://twitter.com/ForexLive Forexlive Homepage ► http://www.forexlive.com/

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FX Daily, November 09: Greenback Stabilizes at Higher Levels

The US dollar's gains scored in the wake of the Fed's signal that will continue on course to gradually hike rates have been extended. Most emerging market currencies are lower as well.  Equity markets are heavy.  Bond yields in Europe and US are a little lower, with the exception of Italian bonds. 

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FX Daily, November 07: Equities and Bonds Jump While the Dollar Slumps

The dollar has fallen against nearly every currency. It had been moving lower at the start of the week, but what seems like a correction broadened and deepened following the US midterm election. The outcome was largely in line with expectations for the Republicans to hold the Senate and the Democrats to take a majority of the House for the first time since 2010.

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Euro and Yen Outlook

Broadly speaking, the risk is that the dollar's cyclical advance is not complete. The drivers will likely remain in place through at least the middle of next year. Additional gradual interest rate hikes by the Federal Reserve and a favorable policy mix underpin the dollar.

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FX Daily, November 6: US Goes to the Polls

Overview: The US dollar is narrowly mixed against the major currencies today, largely consolidating its recent losses. Equities are mixed.  In Asia, Japan, Australia, and Hong Kong equities gained around 1%, while most other bourses were softer.  In Europe, the Dow Jones Stoxx 600 is little changed in late morning turnover.

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Talking Turkey

Turkey’s economic challenges arise from the imbalances created during the economic boom that saw poverty halved between 2002 and 2011, extensive urbanization, and integration in the world economy through trade and capital flows. The dramatic economic changes saw the rise of Erdogan, who was re-elected as President for a second term in June. His party (AKP) is joined by the Nationalists (MHP).

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FX Weekly Preview: Stocks, Trade, and the Fed in the Week Ahead

Last month's downdraft in equities spooked investors. The fear that is often expressed is that the end of the business cycle may coincide with the end of a credit cycle and a return to 2008-2009 crisis. It seems like an increasing number of economists agree with the sentiment expressed by President Trump that the Fed is too aggressive.

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FX Daily, November 01: Dollar Slumps to Start New Month

Overview: It appears that month-end considerations deterred the dollar selling that the technical indicators warned was coming and as the new month starts, the dollar is offered. It is weaker against all the major currencies and most of the emerging market currencies.

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Cheat Sheet

Jobs data ahead of the weekend should recover after a storm depressed the September jobs growth. The base effect will allow earnings to show a strong year-over-year gain. The FOMC meets next week. A 25 bp rate hike in December remains the most likely scenario despite the heightened volatility in the stock market.

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FX Daily, October 31: No Fright on This Halloween

After sliding hard this month, equities continue to stabilize into month-end. All of the equity markets in Asia-Pacific rallied with the help of a solid close in the US. European bourses are higher too as the Dow Jones Stoxx 600 tries to extend the recovery for a third consecutive session, led by energy, materials, and information technology.

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FX Daily, October 30: Another Attempt to Put a Bottom in Stocks

Overview: First, reports suggested that if China refused to make any trade concessions, the Trump-Xi meeting on the sidelines of the G20 meeting next month would not take the issue up.  Fair enough.  Then, new reports indicated that the White was prepared to take additional trade measures if there was no agreement between Trump and Xi. 

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FX Daily, October 29: Market Awaits US Leadership

The Dollar index is trading within last Friday's trading ranges. The year's high, set on August 15, was just shy of 97.00. The euro continues to straddle the $1.14 level but is spending more time in Europe below there. There is a 1.5 bln euro option expiring today at $1.1350 and an almost 600 mln euro option at $1.1400 that will be cut.

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FX Weekly Preview: Thumbnail Sketch of Six Things to Monitor This Week

Global equities have sold off hard. The magnitude of the recent loss is similar to what happened earlier this year. The MSCI World Index of developed countries fell 10.5% in January-February carnage and are now off about 11% this month. The MSCI Emerging Markets Index has matched the 11% loss back at the start of the year, but never truly recovering in between.

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The Canadian dollar not yet telling a story the market believes

Adam Button from ForexLive.com talks with BNNBloomberg. LET’S CONNECT! Facebook ► http://facebook.com/forexlive Twitter ► https://twitter.com/ForexLive Forexlive Homepage ► http://www.forexlive.com/

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FX Daily, October 25: ECB Overshadowed by Equity Market Drama

The Dollar Index broke above 96.00 yesterday and is consolidating today. Provided the 96.00 area holds, the next target is the year's high near 97.00. The euro has been confined to a little more than a quarter of a cent. Players seem reluctant to sell it below $1.14 and note there is a 570 mln euro option at $1.1420 that expires today.

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FX Daily, October 24: Disappointing Flash PMI Weighs on Euro

The US dollar is firmer against the major currencies and most emerging market currencies.  While the seemingly fragile equity markets are still the center of investors' attention, the weakness of the eurozone flash PMI is disconcerting and has sent the euro closer to $1.14.  China's officials continue to unveil initiatives to minimize the disruption of the equity and debt markets while seemingly adding to moral hazard risks. 

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Europe Challenged

Europe is in an untenable position. It is being challenged on many fronts. A weaker euro need not result, but it is the path of least resistance. The economy has lost its momentum. What was first written off as a soft patch, now looks a bit more serious.

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FX Daily, October 23: Stock Slump Pushes Yields Lower and Buoys Yen

There is one main story today, and that is the resumption of the slide in equities. It is having a ripple effect through the capital markets. Bond yields are tumbling. Gold is firm. The dollar is narrowly mixed, though the yen stands out with almost a 0.5% gain. Most of the large equity markets in Asia, including Japan, China, Hong Kong, Korea, and Taiwan were off mostly 2%-3%.

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