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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Weekly Speculative Positions (as of July 04): Speculators Still Dollar Negative

2017-07-10

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2017-07-10

swiss franc july 10
The net short CHF position has fallen from 4.7k short to 0.1k contracts short (against USD). Speculators in the futures market made several significant position adjustments in the CFTC reporting week ending July 4, despite it being a holiday-shortened week.

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FX Weekly Preview: Bank of Canada, US CPI, and UK Labor Update Featured

2017-07-10

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2017-07-10

Yellen will unlikely deviate from general tone of post-FOMC meeting remarks. FOMC minutes were clear, most members see the decline in inflation due to transitory developments. Bank of Canada is expected to hike rates and will likely leave the door open to another rate cut in Q4. UK wage growth has continued to slow.

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FX Weekly Review, July 03 – July 08: Second Euro appreciation phase

2017-07-09

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2017-07-09

EUR/CHF and USD/CHF, July 08
The ECB appears to be preparing investors for a further adjustment of its risk assessment and a reduction of its asset purchases as they are extended into next year. This assessment has marked a new phase of an appreciating EUR/CHF rate. It followed the previous phase, the one with and after the French elections.  

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FX Daily, July 07: Taper Tantrum 2.0 Dominates

2017-07-07

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2017-07-07

Taper Tantrum 2.0, emanating from Europe rather than the United States continues to overshadow other developments. Yesterday, the yield on the 10-year German Bund pushed through the 50 bp mark that has capped the occasional rise in yields in recent months. The record of the ECB meeting was understood as indicating that the official assessment had surpassed the actual communication in order try to minimize the impact.

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FX Daily, July 06: Stocks and Bonds Mostly Heavier, while Dollar Hovers Little Changed

2017-07-06

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2017-07-06

The US dollar is narrowly mixed against the major currencies after being confined to tight ranges through the Asian session and European morning. Equities are nursing small losses, and interest rates are pushing higher. The yield on the 10-year German Bund reached 50 bp for the first time since early 2016. Oil prices have steadied after yesterday's slide.

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FX Daily, July 05: Dollar Firm as Investors Await Fresh Directional Cues

2017-07-05

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2017-07-05

The US dollar is enjoying a firm tone today. Yesterday's two weakest major currencies, the Australian dollar and Swedish krona are the strongest currencies, but little changed on the session. After a strong rebound in the greenback to start the week, it mostly consolidated yesterday.

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FX Daily, July 03: Dollar Bounces to Start H2

2017-07-03

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2017-07-03

The beleaguered US dollar is enjoying a respite from the selling pressure that pushed it lower against all the major currencies in the first six months of 2017. A measure of the dollar on a trade-weighted basis fell about 5% in the first half after appreciating nearly 8% in Q4 16.

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Weekly Speculative Positions (as of June 27): Speculators Scramble to Cover Short Canadian Dollar and Mexican Peso Futures

2017-07-03

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2017-07-03

swiss franc july 03
The net short CHF position has risen from 3k short to 4.7k contracts short (against USD). Speculators bought back previously sold Canadian dollar and Mexican peso futures positions in dramatic fashion in the CFTC reporting week ending June 27.

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FX Weekly Preview: Official Coordination or Is the Market Getting Ahead of Itself?

2017-07-03

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2017-07-03

The consensus narrative sees a coordinated attempt by officials to prepare investors for less accommodative monetary policy. Data from the eurozone and UK may suggest the respective economies are not accelerating. Before getting to the jobs report, the US economic data, like auto sales, may be soft, while the prices paid in the manufacturing ISM may ease.

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FX Weekly Review, June 26 – July 01: Normalization Ideas Weigh on Greenback

2017-07-03

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2017-07-03

EUR/CHF and USD/CHF, July 01
A virus has spread across the markets as the first half drew to a close. Many investors have become giddy. The low vol environment was punctuated by ideas that peak in monetary accommodation is past and that the gradual process of normalization is beginning.

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FX Daily, June 30: Greenback Stabilizes

2017-06-30

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2017-06-30

The US dollar has been battered this week amid a shift in sentiment seen in how the market responded to comments mostly emanating from the ECB's annual conference. It is not really clear that Draghi or Carney gave new policy indications.

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FX Daily, June 29: Run on Dollar and Yen Continues

2017-06-29

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2017-06-29

The main driver of the foreign exchange market is the continued reassessment of the trajectory of monetary policy in the UK, EMU, and Canada. The OIS market does not show that higher rates are discounted for the next policy meeting (August, September, and July respectively), but rather there is greater confidence that, outside of Japan, peak monetary stimulus is behind us.

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FX Daily, June 28: Draghi’s Sparks Mini Taper Tantrum, Euro Chief Beneficiary

2017-06-28

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2017-06-28

Sounding confident, ECB President Draghi seemed prepared to reduce the asset purchases, and this overshadowed his explicit recognition that substantial accommodation is still necessary. This is very much in line with what many, including ourselves, anticipate: At the September ECB meeting, an extension of the asset purchases into the first part of next year, coupled with a reduction in the amounts being purchased.

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Great Graphic: Dollar Breaks Out Against Yen

2017-06-28

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2017-06-28

Dollar's Decline
The dollar is at new lows for the year against the euro and Swiss franc. Draghi's comments earlier that transitory forces are dampening price pressures were seen as broadly similar to the Fed's leadership's assessment about US prices. The implication is that the ECB will announce tapering its purchases as it extends them into next year.

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Great Graphic: US Wage Growth Exceeds Productivity Growth

2017-06-28

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2017-06-28

One of the longstanding challenges to growth US aggregate demand has been that wages have not kept pace with inflation and productivity.  The decoupling appears to have taken place in the late 1960s or early 1970s depending on exactly which metric one uses.In my book, the Political Economy of Tomorrow, I argue the decoupling of men's wages from productivity and inflation made it possible and necessary for women to enter the workforce in large...

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FX Daily, June 27: Euro Surges on Draghi, While Yuan Rises on Suspected PBOC Action

2017-06-27

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2017-06-27

ECB President Draghi told the audience at the annual ECB Forum transitory factors were holding back inflation. This was quickly understood to be bullish for the euro, and it rallied from near the session lows below $1.12 to around $1.1260, a nine-day high.

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FX Daily, June 26: Italian Markets Shrug off Banking Morass and Local Election Results

2017-06-26

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2017-06-26

The US dollar is mostly slightly firmer as North American dealers return to their posts. Ideas that the UK Tories are getting close to a deal with the DUP appears to be lending sterling a modicum of support, as it tries to extend its uptrend into a fourth session. The Japanese yen is the weakest of the majors, rising equities, and yields, spurs the dollar to re-challenge last week's high near JPY111.80.

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Weekly Speculative Positions (as of June 20): Surge in Positioning amid Currency Contract Roll

2017-06-26

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2017-06-26

swiss franc june 26
The net short CHF position has fallen from 14.5 short to 3K contracts short (against USD). The expiration of the June contracts and the roll into September positions appears to have boosted activity in the currency futures, and may obscure the signaling effect. Of the 16 gross positions we track, speculators add to exposure in all but four positions. There speculators covered gross short Swiss franc, Canadian, Australian, and New Zealand dollar...

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FX Weekly Preview: Drivers A Couple Things that Aren’t on Your Economic Calendar

2017-06-26

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2017-06-26

Fed, ECB and BOJ preferred inflation measures will be reported, but are unlikely to change views. Canada's Survey of Senior Loan Officers may be more important than April GDP. US healthcare bill in the Senate and likely action on steel could be the most significant events in the week ahead.

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FX Weekly Review, June 19 – June 24: Stronger Franc with Fading Euro Enthusiam

2017-06-25

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2017-06-25

EUR/CHF and USD/CHF, June 24
Over the last month, the Swiss franc outpaced both EUR and USD. But the change is only little, the EUR fell by 0.60% and the dollar by 0.40%. The main reason for the stronger CHF is the fading enthusiasm after Macron's victory in the French elections and hence a weaker euro. Consequently SNB interventions are rising again.

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