Category Archive: 4) FX Trends
Great Graphic: Euro is Approaching Year-Long Uptrend
The year-long euro uptrend comes in near $1.1035, just below the August lows. The technical are fragile, but the euro is below its lower Bollinger Band. The fundamental driver seems to be the backing up of US rates, and widening premium over Germany.
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FX Daily, October 10: Dollar after the Second Debate
The US dollar has started the new week on a firm note. The light news stream and holidays in Japan, Canada and the United States make for a subdued session. Notable exceptions to the dollar's gains are the Canadian dollar and Mexican peso. Both currencies appear to have been. underpinned by US political developments, the main feature of which is the implosion of the Trump campaign.
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FX Weekly Preview: The Week Ahead: It’s Not about the Data
High frequency economic reports will be not be among the key drivers of the capital markets in the week ahead.The light schedule, consisting mostly of industrial production in Europe, inflation for Scandinavia, and US retail sales, will have minimal impact on rate expectations.
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Great Graphic: US-German 2-Yr Differential and the Euro
The US premium over Germany is at its widest since 2006. This is despite a small reduction in odds of a hike in December. There are many forces are work, but over time, the widening differential will likely give the dollar better traction.
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Swiss Franc Net Shorts Getting Reduced
Last week SNB Q3 window cleaning that led to a big CHF net short position. This week this changed again. Both longs and shorts on CHF increased, but the net short position fell.
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British Pounding
Flash-Crashed. Earlier this morning the British Pound suddenly found itself on the receiving end of a 6% flash crash during Asian trading hours. Some of the losses have been recouped since then, but that will be of little consolation to anyone who may have been long the GBP overnight.
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FX Weekly Review, October 03-07: Dollar Profits on Strong ISM Index
The Franc index lost considerably in the last week, in particularly in comparison to the dollar index. Reason was the exceptionally strong U.S. ISM Non-Manufacturing Index.
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FX Daily, October 07: Sterling Stabilizes After Harrowing Drop, Now Jobs
Sterling again steals the limelight. In early Asia, sterling inexplicably dropped nearly eight cents in minutes (to ~$1840), and on some platforms, may have traded below $1.1380. It almost immediately rebounded but has not resurfaced above $1.2480.
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US and Canada Jobs: Sill Strong Enough for a Rate Hike
The US grew 156k jobs in August, missing the median estimate by about 16k. The July series was revised up by 16k. The unemployment and participate rate ticked up 0.1% to 5.0% and 62.9% respectively. Hourly earnings rose 0.2% to lift the year-over-year rate to 2.6% from 2.4%. The average work week increased to 34.4 hours from 34.3.
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Algos, Barriers, Rumors: Some Theories On What Caused The Pound Flash Crash
As reported moments ago, just around 7:07pm ET, cable snapped and plunged by what some say may have been as much as 1200 pips, dropping from 1.26 to as low as 1.14 according to some brokers, before snapping back up.
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FX Daily, October 06: The Dollar is Firm in Quiet Market
The US dollar is advancing against the major and most emerging market currencies. Activity is subdued and ranges are narrow. We share four observations about the price action. First, the euro has been unable to sustain upticks even after Germany reported a jump in industrial orders three-times more than the median estimate (1.0% vs. 0.3%).
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Canadian Dollar: A Little Less About Oil, a Little More about Rates
The Canadian dollar's link to oil has loosened. Its sensitivity to interest rates has increased. Lumber issue is coming to a head shortly.
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FX Daily, October 05: Euro Remains Firm Despite Dubious Tapering Story
After the sudden rise to 1.0973 the EUR/CHF is falling again. The volatiliy is related to the CHF speculative postion, that suddenly was Short CHF. Traders that moved with the SNB Window Dressing for Q3 are closing their shorts again.
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Why Portugal Matters
DBRS reviews its investment grade rating of Portugal on Oct 21. A cut in its rating would have far reaching implications. A cut in the outlook is more likely than a cut the rating.
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FX Daily, October 04: Sterling’s Slide Continues, EUR/CHF Soars Again
UK Prime Minister May's comments at the Tory Party Conference over the weekend played up the risk of what has been dubbed a hard Brexit and triggered a slide in sterling saw it fall to new 30-year+ low against the dollar just below $1.2760. The EUR/CHF has soared again. Later during the day, it has even achieved 1.0970.
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Cool Video: Bloomberg TV-Dollar Supercycle and Brexit
I reiterated my long-standing view that the euro is going to retest its record lows before the Obama Dollar Rally is over. I warn that the UK's quest to regain sovereignty is an illusion. I announce that my new book will be published in early December or early January.
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The Yen in Three Charts
The dollar is taking out a several month downtrend against the yen. The correlation between the yen and the S&P 500 has broken down. The US 2-year premium over Japan has steadily risen.
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FX Daily, October 03: May’s Confirmation Sends Sterling Lower
Sterling has a bad case of the Monday blues. Even the moon looks distraught. Prime Minister May has confirmed earlier suggestions that she will trigger Article 50 to formally begin its divorce proceedings from the EU at the end of Q1 17. Several officials have already hinted this time frame, though many have been skeptical that Article 50 would be triggered at all, given the complexities of the issues.
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Is The US Dollar Set To Soar?
Hating the U.S. dollar offers the same rewards as hating a dominant sports team: it feels righteous to root for the underdogs, but it's generally unwise to let that enthusiasm become the basis of one's bets. Personally, I favor the emergence of non-state reserve currencies, for example, blockchain crypto-currencies or precious-metal-backed private currencies--currencies which can't be devalued by self-serving central banks or the private elites...
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FX Weekly Preview: Next Week’s Two Bookends
The start of next week will likely be driven by Deutsche Bank's travails and dollar funding pressures, which may or may not be related. The end of the week features the US monthly jobs report. Despite being a noisy, high frequency time series subject to significant revisions, this report like none other can drive expectations of Fed policy.
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