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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Snapchat and Snapcharts: The story is in the pictures

2017-03-06

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I never really understood Snapchat until recently. However, the more I learned about snapchat, the more I realized the charts I look at every day in the forex market are just like the picture storybooks on Snapchat. In fact Snapchat is like Snapcharts.

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FX Weekly Preview: Four Sets of Questions and Tentative Answers for the Week Ahead

2017-03-06

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2017-03-06

The week ahead features the ECB meeting and the US February jobs report. The Reserve Bank of Australia meets, Europe reports industrial production, Japan reports January current account figures, and China reports its latest inflation and lending figures. We frame this week's discussion of the drivers in terms of four sets of questions and offer some tentative answers.

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FX Weekly Review, February 27 – March 04: Dramatic Shift in Fed Expectations Spurs Dollar Gains, but Now What?

2017-03-05

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2017-03-05

Trade-weighted index Swiss Franc, March 04
The pendulum of market sentiment swung hard and fast toward a Fed rate hike in the middle of March. The signals from Fed officials, including Governor Brainard and Powell, spurred the move. According to Bloomberg, the market had discounted a 90% chance of a hike before Yellen and Fischer spoke. A week ago, Bloomberg calculations showed a 40% chance of a move.

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The Resilience of Globalization and the US Dollar

2017-03-04

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2017-03-04

strong
Populism-nationalism is not really a wave sweeping across the world. Where it succeeded was where a center-right party in a two-party system embraced part of the populist agenda. Center-right parties in Europe are not embracing key agenda for populist-naitonalist, but appear to be tacking to the right on domestic issues.

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FX Daily, March 03: Yellen and Jobs Report Last Two Hurdles to US Hike

2017-03-03

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2017-03-03

The US dollar is narrowly mixed as Yellen's speech in Chicago is awaited. The greenback's three-day advance against the euro and four-day advance against the yen is at risk. The dollar-bloc currencies, where speculators in the futures market had gone net long, continue to underperform.

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European Commission Offers 5 Scenarios

2017-03-03

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2017-03-03

Europe not dead
EC is committed to the future of Europe. Juncker presented five scenarios. Even if the populist-nationalist do not win the electoral contests, the national identity issues will continue to exert influence.

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FX Daily, March 02: Dollar Remains Bid

2017-03-02

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2017-03-02

The US dollar is bid against the major currencies as the combination the increased expectation of a Fed rate hike and the President's commitment to fiscal stimulus buoys sentiment. The dollar-bloc, where speculators in the futures market, have grown a net long position, are leading the move.

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Great Graphic: Fed’s Real Broad Trade Weighted Dollar

2017-03-02

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2017-03-02

To begin assessing the dollar's impact on the US economy, nominal bilateral exchange rates may be misleading.  From a policymakers' point of view, the real broad trade weighted measure is more important.  The Federal Reserve tracks it on a monthly basis.

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FX Daily, March 01: Greenback Bounces, More Fed than Trump

2017-03-01

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2017-03-01

FX Performance, March 01 2017 Movers and Shakers
The much-anticipated speech by US President Trump was light on the details that investors interested in, like the tax reform, infrastructure initiative, and deregulation. There appears to be an agreement to repeal the national healthcare, but there is no consensus on its replacement.

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Beware the Ides of March

2017-03-01

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2017-03-01

Numerous events converge in the middle of March. We still lean toward a May hike rate than March. Wilders may garner a plurality of the vote in the Netherlands, but is unlikely to form a government for want of coalition partners. How will the Republican US Congress and President deal with the debt ceiling?

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FX Daily, February 28: Markets Little Changed as Breakout is Awaited

2017-02-28

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2017-02-28

The capital markets are becalmed, and the US dollar is in narrow trading ranges. Month-end considerations are at work, but the key event is much-awaited speech US President Trump to a joint session of Congress this evening (early Wednesday in Asia). The hope is that he provides the policy signals that allow the dollar to break out of its recent ranges.

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The Misplaced Animosity toward Imports

2017-02-28

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2017-02-28

trade
Pity imports, they are misunderstood. Imports create jobs directly and indirectly. Restricting US imports would likely also curb exports.

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FX Daily, February 27: Asia Stumbles, Europe Recovers, Waiting for Trump

2017-02-27

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2017-02-27

chess
The late recovery in US equities before the weekend did little good for Asian markets. Nearly all the Asian equity markets moved lower, led by the 1.0% decline in Japan's Topix. It was the third successive loss for the Topix, which is the long losing streak of the year so far. The MSCI Asia Pacific Index lost 0.6%, further pushing it off the 17-month high seen last week.

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Weekly Speculative Position: More EUR Shorts, Less CHF Shorts .. Again

2017-02-27

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2017-02-27

Speculative Positions Commitments of traders Swiss Franc 27 Feb
Speculators increased their EUR net short position against the dollar, but lowered their CHF net shorts (vs. USD). This tendency confirms our view that EUR/CHF will move towards parity.

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FX Weekly Preview: Macroeconomics and Psychology

2017-02-27

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2017-02-27

There is a broad consensus around the macroeconomic picture. The headwinds slowing the US economy in H1 16 have eased, and above trend growth in H2 16 appears to be carrying into 2017. Q4 16 GDP is expected to be revised to 2.1% up from 1.8%. Many economists appear to accept that a good part, though not all, of the decline in the estimated trend growth in the US, is a function of demographic considerations.

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FX Weekly Review, February 20 – 25: Ranges in FX: Respect the Price Action

2017-02-26

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2017-02-26

Trade-weighted index Swiss Franc, February 25
It is difficult right now to talk about the foreign exchange market using the dollar as the numeraire. The dollar was stronger against most of the major currencies last week, but not the yen or sterling. The Dollar Index itself was little changed, rising less than 0.15%.

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FX Daily, February 24: Anxiety? What Anxiety?

2017-02-24

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2017-02-24

The US dollar is finishing the week on a mixed note in choppy activity in narrow ranges. It is an apt way to finish this week, which has been largely directionless as investors wait for fresh incentives, and are especially looking toward Trump's speech to a joint session of Congress next week.

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FX Daily, February 23: Dollar Chops About, as “Fairly Soon” Does not Mean mid-March

2017-02-23

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2017-02-23

FX Performance February 23 2017 Movers and Shakers
The US dollar is confined to narrow ranges today within yesterday's ranges. Equity markets posted small gains in Asia and have an upside bias in Europe. Core bond yields are softer, and today this includes France, but peripheral European 10-year benchmark yields are 3-6 bp firmer. Italian bonds are the poorest performer, while the 10-year Dutch bond yields are off the most (3.2 bp to 0.56%) despite the looming election.

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Primary Budget Balances in EMU

2017-02-23

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2017-02-23

Greece debt has rallied as a repeat of the 2015 crisis seems less likely. The EC may turn its attention to Italy's structural deficit. There are several countries, including France that is forecast to have a larger primary deficit in 2018 than 2017.

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FX Daily, February 22: Euro Meltdown Continues

2017-02-22

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2017-02-22

FX Performance February 22 2017 Movers and Shakers
February has been cruel to the euro. Of the sixteen sessions this month, counting today, the euro has risen in four, and two of those were last week. Its new four-day slide pushed it below $1.05 for the first time in six weeks as European markets were opening. The $1.0560 area that was broken yesterday, and provided a cap today is 61.8% retracement objective of last month's rally.

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