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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FX Daily, September 26: The Dollar Index has Fallen Four of the Five Times the FOMC met this Year

2018-09-26

by Marc Chandler

2018-09-26

The US dollar is trading with a softer bias in tight ranges. The euro and sterling have been confined to yesterday's ranges, while the greenback briefly traded above JPY113.00 for the first time in two months. The South African rand and Turkish lira are leading the most emerging market currencies higher. Asian equities moved higher, led by Hong Kong, which returned from yesterday's holiday.

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FX Daily, September 25: Greenback Remains at the Fulcrum

2018-09-25

by Marc Chandler

2018-09-25

The major currencies are mixed in quiet turnover. Most of the European currencies are firmer, while the dollar-bloc currencies, yen and Swiss franc are softer. Emerging market currencies are steady to higher, though there are a few exceptions in Asia, where the Indonesian rupiah and the Chinese yuan are off about 0.3%, while the Indian rupee and Malaysian ringgit are around 0.2% lower.

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FX Weekly Preview: Next Week’s Drivers

2018-09-24

by Marc Chandler

2018-09-24

It is a testament to the Federal Reserves communication and the evolution of investors' understanding that we can say that the rate hike that the central bank will deliver is not as important as what it says. A rate hike is a foregone conclusion. According to the CME's model, there is about an 85% chance of December hike discounted as well.

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Portfolio Re-Balancing and the Dollar

2018-09-22

by Marc Chandler

2018-09-22

Boosted by tax reform, deregulation, and strong earnings growth, US equities have motored ahead, leaving other benchmarks far behind. As the Great Graphic here shows, most of the other benchmarks are lower on the year. The S&P 500 (yellow line) is up 8.8% for the year before the new record highs seeing seen now, while the Dow Jones Stoxx 600 from Europe (purple line) is still off 1.7%.

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FX Daily, September 20: The Mixed Performance Makes it Difficult to Talk about The Dollar

2018-09-21

by Marc Chandler

2018-09-21

Sometimes the dollar is the key mover, but sometimes, like today, it seems to be the fulcrum, reflecting disparate moves among other currencies. While the euro is at two-month highs, the yen is near two-month lows. The euro is bouncing off two-month lows and the 100-day moving average against sterling. Most emerging market currencies are advancing against the dollar today.

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FX Daily, September 19: Dollar Trades Heavily as Emerging Markets Follow China

2018-09-19

by Marc Chandler

2018-09-19

One would not have a clue looking at global equities that there has been a sharp escalation in trade tensions in the past 36 hours. As was well tipped the US imposed a 10% tariff on $200 bln of Chinese goods and indicated that the tariff will rise to 25% at the start of next year. President Trump also threatened to quickly follow up with another tariff on $267 bln of Chinese goods it retaliated.

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Dollar Slips, though Emerging Markets Trade Heavily

2018-09-18

by Marc Chandler

2018-09-18

The US dollar is beginning the new week on a soft note, as China threatens not to accept the invitation for trade talks in Washington if the US imposes new tariffs on $200 bln of its goods, which the Wall Street Journal reports could come as early as today. Meanwhile, the MSCI Emerging Markets Index is giving back half of the 2.5% rally seen in the second half of last week.

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FX Weekly Preview: Dollar Pullbacks Remain Shallow as Rate Differentials Widen

2018-09-17

by Marc Chandler

2018-09-17

The trajectory of monetary policy in the US and Europe has been fairly clear. There is practically no doubt that the Fed will hike rates on September 26. Despite softer than expected PPI and CPI figures, the market has become more confident of another move in December. The Federal Reserve's balance sheet unwind reaches its maximum velocity of $50 bln a month in Q4.

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The new neutral for central banks

2018-09-14

by Forexlive

You’ve heard of the neutral rate but the Fed is now talking about the long-term neutral rate and the short-term neutral rate. The implication is that the FOMC (and likely others) are going to hike more in 2019 than we thought and the US dollar will benefit. Adam Button from Forexlive.com talks about neutral rates, … Continue...

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FX Daily, September 14: Dollar Losses Extended

2018-09-14

by Marc Chandler

2018-09-14

The US dollar remains on the defensive after retreating yesterday. Its losses against the most of the major and emerging market currencies are being extended today. The combination of softer US inflation coupled with a less dovish than expected ECB, a Bank of England lifting growth forecasts, while warning that a Brexit without an agreement could spur higher mortgage rates, and a more aggressive rate hike by Turkey conspired to force the dollar...

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FX Daily, September 13: Vulnerable To Disappointment

2018-09-13

by Marc Chandler

2018-09-13

There is an eerie calm in the markets ahead of the highlight for the day and week. The central banks of the eurozone, UK, and Turkey hold policy meetings, and the US reports August CPI. The greenback is a mostly firmer, with the Australian dollar as the notable exception. On the one hand, we would note that is it higher for the fourth consecutive sessions, after finding some support near $0.7100 earlier in the week.

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FX Daily, September 12: Dollar Chops in Narrow Ranges

2018-09-12

by Marc Chandler

2018-09-12

Eurostat confirmed that EMU industrial output fell for a second consecutive month in July. The 0.8% decline was larger than expected and is the third decline of such a magnitude in four months and weighed on the euro. German and Spanish industrial output had surprised on the downside last week, and Italy matched suit today with a report showing a 1.8% contraction, much larger than expected, and bringing the year-over-year rate to -1.3% (workday...

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Great Graphic: Did the CRB Bottom?

2018-09-12

by Marc Chandler

2018-09-12

The CRB index has been trending lower since late May. It fell nearly 10% to retrace 50% of the rally come June 2017. This Great Graphic shows the 4 1/2 month trendline. It had been violated in late August but fell back under it at the end of last week.

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FX Daily, September 11: Dollar May Prove Resilient if it is Turn Around Tuesday

2018-09-11

by Marc Chandler

2018-09-11

The euro and sterling extended their recovery from the US hourly earnings lows seen before the weekend. However, the move stalled in the European morning, after the UK reported better than expected earnings itself. Sterling approached the 61.8% retracement of the decline from the July high (~$1.3365) found just below $1.31. It has been correcting higher since reaching almost $1.2660 on August 15.

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FX Daily, September 10: Initial Extension of Euro and Sterling Losses Stall

2018-09-10

by Marc Chandler

2018-09-10

The US dollar's pre-weekend gains were extended against most the major currencies, but the euro, sterling, and Australian dollar have recovered in the European morning. Emerging markets currencies are mixed. The Indian rupee is the weakest(of the emerging market currencies (~-0.8%) following the widening of the Q2 current account deficit at the end of last week and ahead of the August trade deficit which is expected to show the impact of rising...

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Great Graphic: Is that a Head and Shoulders Bottom in the Euro?

2018-09-08

by Marc Chandler

2018-09-08

The euro recorded the low for the year so far on August 15 near $1.13. We had been anticipating a corrective phase for a couple days before the low was recorded. Recall that the previous Friday, August 10, all the major currencies, but the Japanese yen and Canadian dollar were beyond their Bollinger Bands. The euro recovered toward $1.1735 on August 28, stopping shy of our initial objective of $1.1750.

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Jump in Hourly Earnings is Key to US Jobs, while Canada adds 40k Full-Time Positions

2018-09-07

by Marc Chandler

2018-09-07

The 201k rise in US non-farm payrolls edged above the median forecasts, but the 50k downward revision to the past two-months removes the gloss. It is the first August report in seven years that the initial estimate was above the Bloomberg median. The most important part of the report was the 0.4% jump in hourly earnings, lifting the year-over-year rate to a new cyclical high of 2.9%.

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FX Daily, September 7: Emerging Markets Stabilize While Euro Shrugs Off Disappointing Data

2018-09-07

by Marc Chandler

2018-09-07

The global capital markets are finishing the week on a more stable note than it began. Indeed, since the middle of the week, many of the besieged emerging market currencies, like the South African rand, Turkish lira, and Argentine peso have posted some corrective upticks. Today, the MSCI Emerging Market Index is snapping a seven-day slide register a modest gain, ahead of the Latam session.

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It’s All About Anticipation

2018-09-07

by Forexlive

In many things in life, you can often find ways to anticipate what might happen next. In essence, you see the future. Athletes do it all the time. Animators also make cartoons come more alive, by using cues that anticipate what will happen next. Trading is no exception. If you want to become a better … Continue reading »

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