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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Weekly Speculative Position: CHF getting stronger, net shorts stable

2017-01-23

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2017-01-23

Speculative Positions Commitments of traders Swiss Franc - 23.01
Speculators are net short CHF with 13.7K contracts against USD. This is nearly unchanged. On the other side, the USD/CHF is falling.

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FX Weekly Preview: The Challenging Week Ahead

2017-01-23

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2017-01-23

thought
Investors will finally be able to focus on what the new US President does rather than what he says. The UK Supreme Court decision is expected, but it may not be the driver than it may have previously seemed likely. The dollar-yen rate does not appear to be driven by domestic variable as much as US yields and equities. Prices not real sector data may be the key for the euro.

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FX Weekly Review, January 16 – 21: Dollar Still Appears to Carving out a Bottom

2017-01-22

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2017-01-22

US Dollar/Swiss Franc FX Spot Rate, January 21
The US dollar turned in a mixed performance over the past week. The technical indicators continue to support our expectation that after correcting since mid-December, following the Fed's hike, the dollar is basing.

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Cool Video: Bloomberg’s Daybreak – Dollar Correction

2017-01-21

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2017-01-21

Bloomberg Marc Chandler
I was on Bloomberg's Daybreak: Americas today. The issue at hand was about the dollar's losses since the start of the year. I suggest that the correction actually began a day or so after the Federal Reserve hiked rates in mid-December. I noted that the correction was not just about the dollar but also interest rates.

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FX Daily, January 20: Trump Day

2017-01-20

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2017-01-20

inauguration
The dollar peaked against the yuan two days after the Federal Reserve hiked interest rates in the middle of last month. We argue that that is when the market correction began, not at the turn of the calendar. Despite claims that China's currency is dropping like a rock, it has actually risen for the fifth consecutive week. That is the longest rising streak for the yuan since early 2016.

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Great Graphic: Trade and Tariffs-End of an Era?

2017-01-20

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2017-01-20

Trade-weighted average global tariff rate and trade
This Great Graphic was tweeted by the Financial Time's John Authers, who got it from @fathomcomment. The green line is the inversion of global trade (right-hand scale). The blue line is a trade-weighted average global tariff rate. What the chart shows is that since 1990, the decline in the average tariff coincided with an increase in trade (remember green line is inverted).

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Draghi Lets Steam out of Euro

2017-01-19

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2017-01-19

eurodeflate
US reported stronger than expected series of data, including a large drop in weekly jobless claims for the week of the next NFP survey. Draghi remained dovish, with key phrases retained. Euro needs to break $1.0575 now to confirm a top is in place. Markets still uncertain ahead of the start of the new Administration.

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FX Daily, January 19: Dollar Gives Back Most of Yellen-Inspired Gains

2017-01-19

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2017-01-19

FX Performance, January 19 2017 Movers and Shakers
While the US 10-year yield is unchanged, the dollar is consolidating its gains against the yen in a relatively narrow range of about half a big figure below JPY115.00. It has seen its gains pared more against the euro and sterling, where most of Yellen-inspired gains have been unwound. Sterling found support near $1.2250 and was bid up to $1.2335 by early in the European sessions.

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FX Daily, January 18: Markets Stabilize, Awaiting Fresh Cues

2017-01-18

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2017-01-18

FX Performance, January 18, 2017 Movers & Shakers
The US dollar has stabilized after yesterday's bruising. From a fundamental perspective, little has changed. After hard exit signals from the UK government sent sterling down from $1.2430 on January 5 and 6, to below $1.20 at the start of the week, the pound rallied back to almost $1.2430 yesterday amid "sell the rumor buy the fact" activity.

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Great Graphic: Is the Pound Sterling?

2017-01-18

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2017-01-18

Sterling's 2.75% rally today is the biggest advance in more than eight years. The UK government has done a good job of managing expectations. Over the last week or so, Prime Minister May and Chancellor of the Exchequer Hammond has made it clear that the intention was a "clean break" from the EU.

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A look at the EURUSD as it tests the retracement target and stalls

2017-01-17

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The EURUSD has moved sharply higher but over the last few hours has stalled against a key resistance area. After a big daily move, it becomes harder for a currency pair to extend higher – at least on the day. Traders who rode the trend are happy to take profit. If profit taking can be … Continue...

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FX Daily, January 17: Trump’s Comments Send the Dollar Reeling

2017-01-17

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2017-01-17

The Pound has been subjected to a heavy amount of pressure as we progress further into 2017, with GBP/CHF rates being one of the heaviest losers. The pairing is now trading at a similar level to GBP/USD levels below the 1.22 mark. Their is an enjoyable symmetry between the two from an analysts point of view. Both are well regarded as safe-haven currencies, and in this time of increased uncertainty, both have almost the exact same value in the...

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FX Daily, January 16: Hard Exit Talk Sent Sterling Below $1.20

2017-01-16

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2017-01-16

FX Performance, January 16 2017 Movers and Shakers
The euro has been sold to $1.0580 in the European morning, a cent lower from the pre-weekend high. In addition to the drag from sterling, the euro appears to have been sold in response to the interview in two European papers of the next US President. Among other things, Trump reported claimed that NATO was obsolete and that other countries will leave the European Union, which is largely a German project.

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Weekly Speculative Position: CHF Net Shorts rising, but JPY net shorts falling

2017-01-16

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2017-01-16

Speculative Positions Commitments of traders Swiss Franc - 16.01
Speculators are net short CHF with 14K contracts against USD. This is 1K more than last week. But yen and Euro net shorts are currently diminishing. This could imply that soon CHF net shorts start falling, too.

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FX Weekly Preview: Five Events that Will Drive the Capital Markets in the Week Ahead

2017-01-16

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2017-01-16

fox in hen house
Bank of Canada may be more upbeat following strong jobs and trade figures. China's President Xi will speak at Davos and likely defend globalization and free trade, which some think the US is abandoning. UK PM May's speech on Brexit may be blunted by few surprises, collapse of the government in Northern Ireland, and the pending Supreme Court ruling. ECB will leave rates on hold and look for Draghi to push back against ideas that rise in CPI means QE...

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FX Weekly Review, January 09 – 14: Dollar Correction may be Over or Nearly So

2017-01-15

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2017-01-15

US Dollar/Swiss Franc FX Spot Rate, December 30
For the first week since the election of Trump, the Swiss Franc index had a clearly better performance than the dollar index. It improved by 1.5% in the last ten days.

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The Difference of an A and BBB for Italy

2017-01-14

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2017-01-14

Italian Bank Stocks
DBRS cut Italy's rating to BBB from A. It will increase the haircut on Italy's sovereign bonds used for collateral by Italian banks. It is not a mortal blow or a significant hit, but is not helpful, except to add pressure on Italy and further reduce its ability to respond to another shock.

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A technical look at the EURUSD for the week starting Jan 16th

2017-01-14

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The EURUSD closed the week about 120 pips higher. The low bottomed near the low from 2015 at 1.0462. That was a good bottom for buyers. The topside was contained by retracement resistance. So although bullish for the week, there is some work to do to convince the market that this is nothing bur a … Continue...

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FX Daily, January 13: Corrective Forces Persist

2017-01-13

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2017-01-13

FX Performance, January 13 2017 Movers and Shakers
The Supreme Court Judgement on whether parliament will have to O.K the triggering of article 50 is ongoing and when the ruling is announced expect big swings on GBP/CHF. I think the likely outcome will be that parliament will get the vote, most broad sheet papers have indicated the majority of the judges are in favour of the parliamentary vote.

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Saudis Cut More than Commitment, Lifts Prices

2017-01-13

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2017-01-13

Oil
US refinery demand for oil is near a 30-year high. Demand growth will help catch up to supply. Saudi Arabia (and Kuwait) appear to have cut more output than promised.

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