Category Archive: 4) FX Trends
FX Daily, January 29: A Brief Word
The US dollar is modestly firmer, but nothing to suggest a outright correction rather than consolidation. However, have a dramatic drop over the past month, much more than we think is justified by macroeconomic developments and interest rates, we think the dollar may have overshot.
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FX Weekly Preview: Market Confusion and New Inputs
Many investors are confused, and the official communication only fanned the confusion. Before turning to next week’s key events and data, let's first spend some time, working through some of the confusion. There was no change in policy last week. The US did not suddenly become protectionist. It did put tariffs on solar panels and washing machines.
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The worst way to earn $1257.67
Sometimes a currency analyst starts running his mouth like a boxer. Then this happens. See how I broke all my rules to make a bit of money. The article I was talking about is here: http://www.forexlive.com/news/!/theres-only-one-safer-bet-than-a-t-bill-20170617 LET’S CONNECT! Facebook â–º http://facebook.com/forexlive Twitter â–º https://twitter.com/ForexLive Google+ â–º https://plus.google.com/+Forexlive Homepage â–º http://www.forexlive.com/
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Initial Thoughts on Draghi
ECB President Draghi was unable to arrest the US dollar's slide and euro's surge. But he did not try particularly hard. While many investors are a bit stumped by the pace and magnitude of the dollar's slump, Draghi seemed to imply that it was perfectly understandable given the recovery of the eurozone economy.
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Did Mnuchin Signal a Policy Shift Today?
Did US Treasury Secretary Mnuchin signal a change in the US dollar policy? Probably not. As Mnuchin and President Trump have done before, a distinction was drawn between short- and longer-term perspectives. In the short-term, a weaker dollar says Mnuchin, is good for US trade and "other opportunities". In the longer-term, Mnuchin explicitly acknowledged, "the strength of the dollar is a reflection of the strength of the US economy."
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FX Daily, January 26: Trump-Inspired Dollar Short Squeeze Fades Quickly
It was dramatic. Following the BOJ and ECB's rather mild rebuke of dollar's depreciation, US President Trump cautioned that his Treasury Secretary comments were taken out of context, and in ant event, he, the President ultimately favored a strong dollar. The dollar, which had continued fall after Draghi's post-ECB meeting comments, shot higher in the US afternoon in response to Trump's comments.
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FX Daily, January 25: And Now, a Word from Draghi
With a backdrop of concern about US protectionism and a possible abandonment of the 23-year old strong dollar policy, and among the weakest sentiment toward the dollar in at least a decade, the ECB takes center stage. What a turn of events for Mr. Draghi, the President of the European Central Bank.
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FX Daily, January 24: Dollar Takes Another Leg Lower
North American session sold into the dollar's upticks and Asia followed suit, taking the greenback to new multi-year lows against the euro and sterling while pushing it below the JPY110 level for the first time since last September. US trade action has become latest element of the narrative the seeks to explain the dollar's slide and the decoupling of the greenback from interest rates.
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Great Graphic: Is Aussie Cracking?
The Australian dollar bottomed in early December $0.7500 after having tested $0.8100 a couple of times in September. Since early December, however, the Australian dollar appreciated by nearly 6.5%. As it tested the $0.8000 area, the momentum faded.
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When Trump leaves NAFTA, what happens to CAD
Adam Button on BNN Jan 23 talked about NAFTA discussions and the likelihood of Trump invoking the six-month exit clause. What will it mean for the Canadian dollar, and what are some broader themes in global markets. LET’S CONNECT! Facebook â–º http://facebook.com/forexlive Twitter â–º https://twitter.com/ForexLive Google+ â–º https://plus.google.com/+Forexlive Linkedin â–º https://ca.linkedin.com/company/forex… Homepage â–º...
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FX Daily, January 23: Dollar Stabilizes Near Recent Lows
The US dollar has come back better bid in late Asian activity. The session highlight was the BOJ meeting. BOJ maintained forecasts and policy. There was a small tweak to the inflation assessment, noting that prices were skewed to the downside, and said there was no change in inflation expectations. Last time it has said expectations were weakening. It also reiterated that there was no policy implication to the bond operations.
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FX Daily, January 22: Dollar Remains Heavy
The US dollar closed last week on a firm note, but it has been unable to build on its gains to start the new week. News that Germany's SPD agreed to enter formal negotiations with Merkel's CDU/CSU alliance saw the euro open in Asia around a half a cent higher. However, sellers emerged near $1.2275 but seemed to lose their nerve as the pre-weekend low near $1.2215 was approached.
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Weekly Technical Analysis: 22/01/2018 – USD/JPY, EUR/USD, GBP/USD, USD/CHF
The USDCHF pair found solid support at 0.9564 barrier, which forced the price to rebound bullishly to approach testing the key resistance 0.9655, met by the EMA50 to add more strength to it, while stochastic shows clear overbought signals now.
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FX Weekly Preview: ECB and BOJ Meetings Could be Key to Dollar Direction
The US dollar has been marked lower since the middle of last month. It flies in the face strong growth, rising inflation expectations, and greater conviction that the Fed will continue to raise interest rates this year. Moreover, an oft-cited knock on the dollar, the widening current account, may be offset this year by the impact from US corporations repatriating earnings that have been kept offshore.
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FX Daily, January 19: Dollar Crushed as Government Shutdown Looms
The US dollar is broadly lower as the momentum feeds on itself. Asia is leading the way. The Japanese yen, Taiwanese dollar, Malaysian Ringgit, and South Korean won are all around 0.45% higher. Asian shares also managed to shrug off the weakness seen in the US yesterday. The MSCI Asia Pacific Index advanced 0.7%. It is the sixth consecutive weekly gain. The dollar's drop comes as US yields reach levels now seen in year. The 10-year yield is at its...
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FX Daily, January 18: Currencies Consolidate After Chop Fest
The US dollar rallied in the North American afternoon yesterday and the timing coincided with the release of the Fed's Beige Book that saw several districts report wage and price pressures. The US 10-year yield moved toward toward 2.60%, and helped by speculation that as US companies repatriate earnings kept abroad that they may have to liquidate the investments, some of which are thought to be in Treasuries.
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China and US Treasuries
The US Treasury market was consolidating yesterday's 7.5 basis point jump in 10-year yields when Bloomberg's headline hit. The claim was that Chinese officials are "wary of Treasuries". Yields rose quickly to test 2.60% and the dollar moved lower. It is difficult to determine the significance of the claim as the Bloomberg story does not quote anyone.
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What I think about cryptocurrencies
Join the ForexLive Telegram channel: https://t.me/joinchat/HveypkdU1-wmyDHb8gddSA Adam Button from ForexLive talks about the future of Bitcoin, cryptocurrencies and a great place where traders can talk about the future of digital assets. If you want to trade crypto, this is the place to learn, get news and share tips.c *back in 2013: http://www.forexlive.com/news/!/what-i-learned-from-the-bitcoin-bulls-nov-18-20131118 LET’S CONNECT! Facebook...
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FX Daily, January 17: Dollar Stabilizes After Marginal New Lows
After a shallow bounce in Asia and Europe yesterday, the dollar slipped lower in North American yesterday. Asia was happy to extend those dollar losses, and the greenback was pushed to marginal new lower in Asia, but has come back in the European session. The next result is a choppy but flattish consolidation compared with last week's closing prices.
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Great Graphic: Treasury Holdings
The combination of a falling dollar and rising US interest rates has sparked a concern never far from the surface about the foreign demand for US Treasuries. Moreover, as the Fed's balance sheet shrinks, investors will have to step up their purchases.
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