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 Preview: Politics Not Economics is Driving the Markets

2017-02-06

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2017-02-06

The Fed is more confident this year of stable growth and rising inflation. The new US Administration's economic agenda is beginning to take shape, though it is not clear that consumer interests will be pursued. There are several considerations, including politics in Europe, that are driving European rates higher. The RBA and RBNZ meet next week. Neither is expected to change policy.

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FX Weekly Review, January 30 – February 04: Reversal of Trump Reflation Trade Continues

2017-02-05

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2017-02-05

Swiss Franc Index Trade-weighted index Swiss Franc 1M
The Swiss Franc index remained around the 2% gain that for the last month, the recovery from the Trump reflation trade. In this trade, investors preferred U.S. against European stocks. This tendency, however, is reversing now - and with it the franc recovered.

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FX Daily, February 03: US Jobs Trump Europe’s Service PMIs

2017-02-03

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2017-02-03

FX Performance, February 03 2017 Movers and Shakers
Ahead of the weekend, there are two series of economic reports. The first are Europe's service PMI reports and the second is the US employment report. Neither report is likely to alter views significantly, but the latter has greater potential to move the market.

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The Future of Globalization

2017-02-03

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2017-02-03

antiglobalization
antiglobalizationThe cross-border movement of goods, services, and capital increased markedly for the thirty years up to the Great Financial Crisis. Although the recovery has given way to a new economic expansion in the major economies, global trade and capital flows remain well below pre-crisis levels. It had given rise to a sense globalization is ending.

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FX Daily, February 02: Dollar Remains on Back Foot After ADP and FOMC

2017-02-02

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2017-02-02

FX Performance, February 02 2017 Movers and Shakers
The US dollar remains on its back foot despite the stronger than expected ADP job estimate and the FOMC that said nothing to dissuade investors that it will be gradually raising rates this year.  

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Great Graphic: French Premium over Germany Continues to Grow

2017-02-02

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2017-02-02

French Premium Over Germany Since 2014
European premiums over Germany typically increase in a rising interest rate environment. France's premium is at the most in two years. France is still set to turn back the challenge from Le Pen.

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Thoughts about the Fed’s Balance Sheet

2017-02-02

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2017-02-02

hotair balloon
Several regional Fed presidents want to begin talking about shrinking Fed's balance sheet. Leadership does not appear to have great urgency, so don't expect anything in this week's statement. First step more hikes, then refrain from reinvesting payments and maturities, but slowly.

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Defining and Limiting your Risk. Why is it so important in your trading?

2017-02-02

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I talk a lot about defining and limiting risk in trading. Why is it so important. Watch this video and find out the importance.

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FX Daily, 01 February: Markets Stabilize, Investors Await Signals from US data and FOMC, and POTUS

2017-02-01

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2017-02-01

(commentary will be sporadic for the next couple of weeks during a European business trip) The US dollar is consolidating yesterday's losses that were spurred speculation that the US was abandoning the more than 20-year old strong dollar policy. The meaning of that policy was clear to global investors even if it was often parodied.

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Trade is Trump’s Centerpiece

2017-02-01

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2017-02-01

Trans-Pacific Partnership
Investors are anxiously awaiting more details on the new US Administration's economic policies and priorities. Part of the challenge is that the cabinet represents a wide range of views and it is not clear where the informal power lies, or whose call is it. In terms of economic policy, trade is being given priority. It is seen as the key to the jobs and growth objectives.

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Pressure on Greece Mounts, New Crisis Looms

2017-02-01

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2017-02-01

greece
Greece needs to implement its commitments in the next few weeks or it faces a new crisis. The more the government implements its commitments, the less public support it draws. New elections in Greece cannot be ruled out.

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FX Daily, January 31: Markets Look for Solid Footing

2017-01-31

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2017-01-31

FX Performance, January 31 2017 Movers and Shakers
The immigration imbroglio in the United States is being cited in various accounts for the price action, including yesterday's drop in the S&P 500, where the intraday loss was the largest since before the election. The drama is also being blamed for the dollar's losses yesterday, which it is consolidating today.

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Trump and the Dollar

2017-01-31

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2017-01-31

Dollar Shoes
US official comments on the FX market appear to have increased in frequency. They are mostly warnings about a strong dollar, but not all comments are dollar-negative. Policy is the ultimate driver but comments pose headline risk.

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How to trade the Trump White House right now

2017-01-30

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Way too many people have the Trump trade backwards, they’re focused on the wrong thing. Adam Button talks about what matters to the market and how to trade the US dollar in the first weeks of the Trump Presidency.

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FX Daily, January 30: EUR/CHF falls further to 1.650

2017-01-30

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2017-01-30

FX Performance, January 30 2017 Movers and Shakers
The EUR/CHF collapsed once again to 1.0650. This rate broke the 1.0680 - 1.0700 that constituted the previous intervention area. Reasons can be found in the weak U.S. GDP weak, in Trump's foreign trade policy and in the strong Swiss trade balance.

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Adventures in Currency Debasement

2017-01-30

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2017-01-30

Weekly Dollar Index
The U.S. dollar, as measured by the dollar index, has generally gone up since mid-2014. The dollar index goes up when the U.S. dollar gains strength (value) against a basket of currencies, including the euro, yen, pound, and several others. Conversely, the dollar index goes down when the U.S. dollar loses value.

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Weekly Speculative Position: Net Short Euro and Yen Are Falling. Short CHF Stable

2017-01-30

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2017-01-30

Speculative Positions Commitments of traders Swiss Franc - 30.01
Speculators are net short CHF with 13.6K contracts against USD. This is nearly unchanged. But net short of Euro and Yen are Diminishing.

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FX Weekly Preview: Yellen nor Kuroda nor Carney will Take the Spotlight from Trump

2017-01-30

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2017-01-30

eagle
Fed, BOJ, and BOE meet next week, each may adjust economic assessments in more favorable direction. Key challenge for many investors is the new US Administration. US employment, EMU inflation, Q4 GDP, and China's PMI are among the data highlights.

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FX Weekly Review, January 23 – 28: Dollar Downwards and CHF Upwards Correction, for how long?

2017-01-29

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2017-01-29

US Dollar/Swiss Franc FX Spot Rate, January 21
The US dollar spent the first month of the new year correcting lower after a strong advance in the last several months of 2016. We argue that the correction actually began in mid-December following the Federal Reserve's rate hike.

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Great Graphic: Mexico and China Unit Labor Costs

2017-01-29

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2017-01-29

Unit Labor Costs in China and Mexico 2007 - 2015
Mexico has been gaining competitiveness over China before last year's depreciation of the peso. The depreciation of the peso, and other US actions can contribute to the destabilization of Mexico. An economically prosperous and stable Mexico has long been understood to be in the US interest.

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