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 Daily, May 10: Markets Adjust to North Korean Threat, Fifth Fall in US Oil Inventories and Trump Drama

2017-05-10

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2017-05-10

Investors absorbed a few developments that might have been disruptive for the markets with little fanfare. North Korea's ambassador to the UK warned that his country would go ahead with its sixth nuclear test, as South Korea elected a new president who wants to reduce tensions on the peninsula.

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FX Daily, May 09: Dollar Firms amid Position Adjustments

2017-05-09

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2017-05-09

The election of Macron as French President has set off a bout of position adjustment that has seen the euro push back into the $1.0850-$1.0950 range that had confined activity for the two weeks between the first and second rounds of the French presidential election.

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Weekly Speculative Positions (as of May 02): Euro Shorts Covered, Yen Longs Liquidated

2017-05-08

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2017-05-08

The net short CHF position has risen to 17K contracts (against USD). It was feast or famine in the adjustment of speculative positions in the currency futures market during the CFTC reporting period ending May 2. Speculators either made large adjustments or very small adjustments, and little in between.

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FX Daily, May 08: Euro Bought on Rumor, Sold on Fact

2017-05-08

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2017-05-08

The euro initially opened higher in Asia following confirmation that Macron was elected the next president of France, but quickly fell below $1.0960 before bouncing back toward $1.10 only to be sold again in early Europe below the pre-weekend low near $1.0950. A break now of $1.0930 could signal a return to the lower end of the range seen since the first round of the French election near $1.0850-$1.0870.

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FX Weekly Preview: Dollar Drivers

2017-05-08

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2017-05-08

US retail sales and CPI should help bolster confidence that the Fed was right about the transitory nature of Q1 slowdown. Bank of England meets; Forbes will likely continue with her dissent, but likely failed to convince her other colleagues of the merit of an immediate rate hike. French politics are center stage, but German state election and South Korea's national election are also important.

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FX Weekly Review, May 01 – 06: Seasonal Patterns and Yen Crosses

2017-05-07

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2017-05-07

Swiss Franc Index Trade-weighted index Swiss Franc 1M
The Swiss Franc index gained 1.5% in the last month, the biggest part of it is from the last week. The trade-weighted indices the Fed tracks are updated monthly. The Bank of England calculates the effective exchange rate on a daily basis. It has not fallen since April 24.

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Great Graphic: Gas and Oil

2017-05-06

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2017-05-06

Steep falls in gasoline and oil prices. Large build in gasoline inventories and record refinery work shifted some surplus from oil to the products. OPEC is expected to roll over its output cuts, but non-OPEC may find it difficult and US output continues to rise.

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April Jobs Won’t Change Minds

2017-05-05

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2017-05-05

There is something for everyone in today's US jobs report, and at the end of the day, it is unlikely to sway opinion about the direction and timing of the next Fed move. The greenback itself may remain range bound after the initial flurry. On the other hand, the disappointing but noisy Canadian data underscores the risk of a more dovish slant to the central bank's neutral stance next week.

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FX Daily, May 05: Mixed Dollar Ahead of US Jobs Data and Fed Talk

2017-05-05

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2017-05-05

The US dollar is narrowing mixed as the employment data, and Fed speeches are awaited. Six Fed officials speak today, including Yellen and Fischer. Regional Presidents Williams, Rosengren Evans and Bullard also speak. It will be the first flurry of speeches since the FOMC meeting.

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FX Daily, May 04: Greenback Struggles to Sustain Upticks, Though Odds of June Hike Rise

2017-05-04

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2017-05-04

The US dollar is struggling to maintain even modest upticks against the euro and sterling despite the recognition of the increased likelihood of a June Fed hike. Bloomberg sees current pricing in the Fed funds as making a hike in June a near certainty (97.5%), while the CME and our own calculation estimates the market is discounting around 70%-75% chance of a hike.

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What is the Bank of Japan to Do?

2017-05-04

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2017-05-04

Policy is on hold. There is several areas which the BOJ can adjust its forecast or forward guidance. BOJ is more likely to err on the side of caution.

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FX Daily, May 03: Marking Time

2017-05-03

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2017-05-03

The global capital markets are relatively calm. Japan, South Korea, and Hong Kong markets are closed for national holidays. Investors await the FOMC statement, though expectations could not be much lower. The disappointing US auto sales, and poor Apple sales figures reported yesterday have had little impact on the broader investment climate.

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Euro Drivers

2017-05-03

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2017-05-03

Correlation between the change in the US-German two-year differential and euro remains robust. The German two-year yield has jumped in recent weeks but looks poised to slip back lower. US two-year yield has eased but is knocking on 1.30%, an important level.

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FX Daily, May 02: Dollar and Yen Heavy, Equities Trade Higher and Bonds Lower

2017-05-02

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2017-05-02

The US dollar is sporting a softer profile against most of the major and emerging market currencies. The Japanese yen is the main exception. The greenback is rising against the yen for the fourth session and the sixth of the past seven. The dollar's gains against the yen coincide with the 10-12 bp recovery in the US 10-year yields over the past ten sessions.

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Weekly Speculative Positions (as of April 25): Bulls Take Charge of 10-year Note Futures, while Sterling Bears Hang On

2017-05-01

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2017-05-01

Speculative Positions Commitments of traders Swiss Franc May 01
The net short CHF position has risen to 17K contracts (against USD). The striking development among speculators in the futures market is the reversal of the record gross (and net) short Treasury note position two months ago.

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FX Daily, May 01: May Day Calm

2017-05-01

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2017-05-01

Many financial centers are closed for May. Japanese markets were open today, but will be closed for three sessions beginning Wednesday for the Golden Week celebrations. The US dollar is narrowly mixed.

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FX Weekly Preview: Looking Through the FOMC Meeting as it Looks Past Poor Q1 GDP

2017-05-01

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2017-05-01

US jobs and auto sales data may be more important than the FOMC meeting. Norway and Australia's central bank meets. Neither is expected to change policy. All three large countries that reported Q1 GDP figures last week - US, UK, France - disappointed expectations.

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FX Weekly Review, April 24 – 29: Dollar Remains the Fulcrum

2017-05-01

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2017-05-01

Swiss Franc Index Trade-weighted index Swiss Franc 1M
Often the US dollar, as the numeraire, seems to be the main actor in the foreign exchange market. Other times, the dollar appears to be at the fulcrum between European currencies on one hand, and the dollar-bloc currencies on the other hand. Another way expressing this is whether there is a dollar-move underway or is it really more about the crosses.

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NAFTA Trade Update

2017-04-30

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2017-04-30

The trade tensions between the US and Canada set the Canadian dollar to lows for the year. The dollar's downside momentum against the Mexican peso has eased. The Canadian dollar looks attractive not against the US dollar but against the peso.

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Longevity and Income

2017-04-29

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2017-04-29

Rich people live longer than poor people in the US. This disparity undermines the progressive nature of Social Security. Disparity of income seems more important than the slowdown in growth in explaining why few US people are doing better than their parents at the age of 30.

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