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 Weekly Review, April 10-14: Swiss Franc loses against the Yen, but wins against Dollar

2017-04-16

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2017-04-16

Trade-weighted index Swiss Franc, April 01
Last week the Swiss Franc improved against both euro and dollar, but - compared to its safe-haven counterpart Japanese Yen - it had a bad performance. We expect strong SNB interventions.

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Decoupling of Oil and US Interest Rates

2017-04-16

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2017-04-16

US yields have trended lower as oil prices have trended higher. The correlation between the 10-year breakeven and oil has also weakened considerably. Technicals readings are getting stretched, but no compelling sign of a top.

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Euro’s Record Losing Streak Against the Yen

2017-04-15

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2017-04-15

Euro/Yen
The euro has fallen for 11 consecutive sessions against the yen. Interest rates, US and German in particular, seem to be the main driver. Technicals are stretched, but have not signaled a reversal yet.

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Cool Video: Making Sense of the New Administration

2017-04-15

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2017-04-15

I was on Bloomberg TV earlier today, chatting with David Gura about how to try to make sense of new Trump Administration. I suggest that the decision-making style and practical concerns have created two wing to the Administration. There is a populist-nationalist wing that is home to America First ideas.

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FX Daily, April 14: Holiday Markets Remain on Edge

2017-04-14

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2017-04-14

The holiday-induced calm in the capital markets conceals a high degree of anxiety. The investment climate has been challenged by heightened geopolitical risk and unusual complaints about the US dollar's strength from the sitting US President. While sending an "armada" toward the Korean peninsula, the US ordered a missile strike against Syria in retaliation for the use of chemical weapons and dropped the largest bomb in the world on Afghanistan.

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Trade Notes: China and Prospects for a New Executive Order

2017-04-14

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2017-04-14

China's trade concessions seem modest, but little discussion of US concessions. Reports suggest Trump is set to sign a new executive order to investigate trade practices in steel, aluminum, and maybe household appliances. Trade imbalances and floating currencies are not mutually exclusive.

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FX Daily, April 13: Greenback Stabilizes After Trump Induced Slide

2017-04-13

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2017-04-13

The US dollar slid after US President Trump complained about its strength. The sell-off extended into early Asian activity, before stabilizing. It is mixed in late morning European turnover, which is already lightening up due to the extended Easter holiday.

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FX Daily, April 12: Investors Catch Breath, Markets Stabilize

2017-04-12

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2017-04-12

Markets are calmer today. The significant movers yesterday have stabilized. The dollar has been unable to resurface above JPY110, but after plumbing to new lows near JPY109.35 in Asia, the dollar has recovered back levels since in North America late yesterday. The decline in the US 10-year yield was also initially extended in Asia before stabilizing and returning to levels seen in the US afternoon.

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FOMC Minutes Suggest Balance Sheet May Begin Shrinking This Year

2017-04-12

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2017-04-12

FOMC minutes increased likelihood that Fed will begin reducing its balance sheet late this year. There does not seem to be a consensus on other issues. The strength of the ADP report contrasts with softness seen in the ISM and PMI non-manufacturing surveys.

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FX Daily, April 11: Dollar Pushed Lower in Subdued Activity

2017-04-11

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2017-04-11

The US dollar has a slight downside bias today through the European morning. The market does not seem particularly focused on high frequency data, though sterling traded higher after an unchanged year-over-year reading of 2.3%, and the euro traded higher after a stronger Germany ZEW survey.

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Impressive Japanese Flows at the end of the Fiscal Year

2017-04-11

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2017-04-11

Japanese investors bought foreign bonds in the last week of March for the first time in nine weeks. Foreigners bought the most Japanese stocks since last April. The pain trade is for a break of JPY110.

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Weekly Speculative Positions (April 4 Data): Reduction in CHF Net Shorts

2017-04-10

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2017-04-10

Speculative Positions Commitments of traders Swiss Franc April 10
Speculators continued to reduce their net short euro exposure until March 28. Apparently they do not understand the difference between core inflation and the headline figure. In the last week, finally they increased their Euro shorts again.... and reduced their CHF shorts.

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FX Weekly Preview: A New Phase Begins

2017-04-10

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2017-04-10

There were no celebrations; no horn or trumpets, nary a sound, but an important shift took place last week. The shift was signaled by two events. The first was the US strike on Syria, and the second was investors' willingness to look past Q1 economic data.

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FX Weekly Review, April 03-08: Dollar Recovery Can Continue, 10-year Yield Set to Rise

2017-04-10

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2017-04-10

Trade-weighted index Swiss Franc, April 01
The US dollar appreciated against most of the major currencies last week. The Japanese yen was the chief exception. It rose about 0.5% as US yields remained heavy and equities were mostly softer. The Dollar Index did not fall in any session last week. It has had one losing session over the past nine, and that was the last day in March when the Dollar Index slipped less than 0.1%. It finished the week a bit above thee 61.8% retracement objective of...

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US Jobs Growth Disappoints

2017-04-08

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2017-04-08

The US jobs growth slowed considerably more than expected in March and the disappointment pushed the dollar and equities initially lower. The US created 98k jobs in March, well below market expectations for around 175k jobs.  Adding insult to injury, revisions to the January and February data took off another 38k job.

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Short Note on US Employment Report

2017-04-07

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2017-04-07

The US jobs data is notoriously difficult to accurately forecast consistently.  I do not claim to do so now.  My intent is more modest.  It is simply to point out why I there is risk that the jobs data is disappointing, especially after the stronger than expected ADP estimate. 

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FX Daily, April 05: Dialing it Up on Hump Day

2017-04-05

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2017-04-05

he dollar is practically unchanged against the euro and yen in the first two sessions of the week. The pace can be expected to pick up starting Wednesday. Although the euro slipped through $1.0650, it was not sustained, and on Monday and Tuesday, the euro finished near its highs.

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Inclusion in SDR Does Not Spur Official Demand for the Yuan

2017-04-04

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2017-04-04

China's share of global reserves is in line with expectations prior to its inclusion in the SDR. Three factors influencing allocated reserves - valuation, portfolio decisions, and China's gradual inclusion in allocated reserves. The Swiss franc's as a reserve asset diminished, but the "other" category appeared robust.

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Weekly Speculative Positions: Last Reduction of Euro Short Positions?

2017-04-03

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2017-04-03

Speculative Positions Commitments of traders Swiss Franc April 03
Speculators continued to reduce their net short euro exposure until March 28. Apparently they do not understand the difference between core inflation and the headline figure.

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