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 Positions: Short CHF Are Increasing

2016-12-03

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2016-12-03

The net short CHF speculative position is close to reaching new records. Shortly before the end of the peg, speculators were net short CHF by 26K contracts. Now we are at 24.3K.

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What Would Make This Dollar Bull Nervous

2016-12-03

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2016-12-03

US Dollar Currency Index, December 02
USD had a large rally in November. We had been looking for a short and shallow pullback. Here are thoughts about what would signal an outright correction.

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FX Daily, December 02: Is it About US Jobs Today?

2016-12-02

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2016-12-02

FX Performance, December 02 2016 Movers and Shakers
The capital markets are finishing the week amid speculation that the driving forces of the past three weeks are ebbing. Global equities and the dollar may be snapping three-week advances. The issue is whether it is a consolidation or trend change. The former is a more prudent assumption until proven otherwise. As a rough and ready signal, the 100.60 level in the Dollar Index, which corresponds to the lows November 22 and November 28 is reasonable.

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Mixed Jobs Report, but Unlikely to Deter Expectations for Fed Hike

2016-12-02

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2016-12-02

The US dollar has slipped lower in response to the jobs data, but quickly recovered. The details are mixed, but is unlikely to change views on the outlook for Fed policy. The headline job creation was in line with expectations at 178k. Job growth of the back two months were shaved by 2k, concentrated in October. The unemployment rate dropped to 4.6%, the lowest since 2007.

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Chandler: Austria Vote a Bigger Risk Than Italy

2016-12-02

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Dec.01 — Marc Chandler, Brown Brothers Harriman head of currency strategy, discusses the Italian referendum and explains why he thinks the Austrian election may be more of a threat to markets. He speaks with Bloomberg’s Joe Weisenthal on “What’d You Miss?”

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Cool Video: Bloomberg TV-Italy and Austria this Weekend

2016-12-02

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2016-12-02

Marc Chandler
I was on Bloomberg Television with Joe Wisenthal this afternoon. I explain what I have been suggesting for the past couple of weeks, namely that the Austrian presidential election this weekend is the third point in the populist-nationalist wave, not Italy.

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FX Daily, December 01: Dollar is on the Defensive, though Yields Rise

2016-12-01

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2016-12-01

FX Performance, December 01 2016 Movers and Shakers
The US dollar is trading heavily against most of the major currencies, but the general tone appears consolidative in nature. Despite a disappointing UK manufacturing PMI (53.4, a four-month low), sterling is near a three-week high above $1.2600.

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Brexit Minister Sends Sterling Higher

2016-12-01

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2016-12-01

brexit
UK could pay for single market access. UK's position still seems fluid. The Supreme Court will hear the government's appeal next week.

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Austrian Presidential Election is Important even if Overshadowed by Italy’s Referendum

2016-11-30

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2016-11-30

Austria
Italy's referendum defeat is not simply a victory for populist-nationalist forces. Freedom Party victory in Austria is a victory for said forces. Even if Hofer wins, there are sufficient checks that make it difficult to hold EU or EMU referendum.

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FX Daily, November 30: Renewed OPEC Hopes and Month End Featured

2016-11-30

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2016-11-30

FX Performance, November 30 2016 Movers and Shakers
Rates for buying Swiss Francs dollars remain incredibly subdued post Brexit but there has been a general improvement over the last month. Rates for the moment appear to have found support over 1.24 for GBP CHF and this has largely come about following the Trump US presidential election victory. Despite a leaked government document titled Have cake and eat it, the markets and sterling were largely unphased.

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Bernanke Suggests How to Use the Dot Plots

2016-11-30

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2016-11-30

Bernanke
The dot plots are not FOMC commitments or an aggregate view of the FOMC. They are a collection of individual economic forecasts based on the most likely scenario and their view of appropriate policy. The SEP is useful for understanding how Fed officials view the long-term economic parameters, which appears to explain the downward shift in the long-term equilibrium rate for Fed funds.

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Some Thoughts on Q3 US GDP

2016-11-30

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2016-11-30

monkey-thinking
US Q3 was revised higher mostly due to consumption. Business investment was a drag. Profits rose to snap a five-quarter slide.

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FX Daily, November 29: Dollar Comes Back Mostly Firmer, but Focus is Elsewhere

2016-11-29

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2016-11-29

FX Performance, November 29 2016 Movers and Shakers
The US dollar correctly lowered yesterday, but most of the selling was over by the end of the Asian session, and the greenback steadied in Europe and North America. The dollar is firm against the euro and yen but within yesterday's broad trading ranges. The Australian and Canadian dollar's gains from yesterday are being pared.

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Great Graphic: Yen and Yuan Connection

2016-11-28

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2016-11-28

The US dollar has rallied against both the Japanese yen and Chinese yuan since the end of September. Through today, the yen has fallen 9.8% and the yuan has fallen by 3.5%. What they have in common is the rise in US interest rates relative to their own. Since September 30, the US 10-year yield has from below 1.60% to above 2.40% at the end of last week. Japan's 10-year yield has risen from minus nine basis points at the end of September to five...

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FX Daily, November 28: Corrective Forces Seen in Asia, Subside in Europe

2016-11-28

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2016-11-28

FX Performance, November 28 2016 Movers and Shakers
As soon as markets opened in Asia, the greenback was sold, and corrective forces that had been nipping below the surface took hold. The euro, which had finished last week below $1.0590, rallied nearly a cent. Before the weekend, the greenback had pushed to almost JPY114, an eight-month high, before closed near JPY113.20. It was sold to almost JPY111.35 in early Asia. Sterling extended last week's gains and briefly poked through $1.2530, to reach...

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FX Weekly Preview: Shifting Portfolio Preferences Continue to Drive Capital Markets

2016-11-28

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2016-11-28

Forces emanating from the US and Europe are driving the capital markets. The moves may be stretched technically, but the market adjustment has further to run as not even two Fed hikes are discounted for next year. European political concerns and an ECB expected to continue its asset purchases have driven German 2-year yields to new record lows.

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FX Weekly Review, November 21 – November 25: Dollar Strength Losing Steam

2016-11-27

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2016-11-27

Swiss Franc Index Trade-weighted index Swiss Franc
After a three-week rally, the dollar bulls finally showed signs of tiring ahead of the weekend. At least against the Swiss Franc index, the dollar index could further advance. We had observed SNB interventions in the previous week that kept the euro mostly above 1.07.

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Why Is the US Dollar Rising?

2016-11-26

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2016-11-26

US Dollar Index - Cash Settle
Note the apparent breakout above 100 and the constructive similarities to the 2014 breakout that was followed by a 20% increase in the purchasing power of the USD relative to other currencies.

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FX Daily, November 25: Corrective Forces Emerge, but Underlying Trend is Evident

2016-11-25

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2016-11-25

FX Performance, November 25 2016 Movers and Shakers
The US dollar's recent gains are being trimmed today, and it is down against all the major currencies. Many emerging market currencies, including the Turkish lira, Indian rupee, and Hungarian forint are firmer today.

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Short Summary on US Thanksgiving

2016-11-25

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2016-11-25

Turkey
Euro fell to new 20-month lows before steadying. The dollar extended its recovery against the yen. Emerging markets remained under pressure, and Turkey's central bank surprised with a 50 bp hike in the repo rate.

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