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, November 23: Dollar Sees Flat Consolidation while the Equity Advance Fizzles in Europe

2016-11-23

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2016-11-23

FX Performance, November 23 2016 Movers and Shakers
The US dollar is trading inside yesterday's ranges against the euro and yen. The dollar's tone matches the consolidation in the debt market ahead of today's slew of US data and tomorrow's holiday. Tokyo markets were on holiday.

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FX Daily, November 22: Bonds and Stocks Rally, Leaving Greenback to Meander

2016-11-22

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2016-11-22

FX Performance, November 22 2016 Movers and Shakers
The US dollar entered a consolidative phase yesterday, and this carried into today's activity.While the foreign exchange market is sidelined as the two-week trend slows, the stocks and bonds are posting strong gains today. Equities are being led by energy and materials, as oil and industrial metals continue to advance. Bond are recovering from their recent slide.

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FX Daily, November 21: Flattish Consolidation Hides Dollar Strength

2016-11-21

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2016-11-21

FX Performance, November 21 2016 Movers and Shakers
The news over the weekend is primarily political in nature. Sarkozy is going to retire (again) after taking a drubbing in the Republican Party primary in France. Fillon, the self-styled French Thatcher unexpected beat Juppe, but without 50% and therefore the results set up the run-off this coming weekend. It is as if, knowing their candidate will likely face Le Pen in the final round next spring, the Republican Party might as well chose the most...

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FX Weekly Preview: Shifting Paradigms and the Market Adjustment

2016-11-21

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2016-11-21

Perceptions of two trends shape the investment climate: reflation and nationalism. Fed rate hike set for next month, barring significant surprise. Japan's trade surplus is growing even as imports and exports continue to contract.

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BIS: The VIX is Dead, The Dollar is the new “Fear Indicator”

2016-11-20

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2016-11-20

Leverage of US securities broker-dealer sector
Over the past few years, one of the recurring themes on this website has been an ongoing discussion of how the VIX has lost its predictive value as a market risk indicator. This culminated recently with a note by Russel Clark who explained in clear term why the "VIX is now broken." Today, in a fascinating note Hyun Song Shin, head of research at the Bank for International Settlements, the "central banks' central bank" has agreed with the...

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FX Weekly Review, November 14 – November 18: Best Dollar Weeks since Reagan

2016-11-20

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2016-11-20

Trade-weighted index Swiss Franc, November 18, 2016
The US dollar has recorded its best two-week performance since Reagan was President. The weeks after Trump's election continue to see a weakening of the Swiss Franc, while the dollar index is on a steady rise. Still both the euro and the yen have seen worse performance than the Swiss Franc. The euro is currently under 1.07.

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Adam Button at the London Stock Exchange

2016-11-20

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Adam Button from ForexLive talks about the outlook for currencies after Donald Trump won the US election. What to watch for from the US dollar and why the forex market was caught off guard.

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The Italian Job

2016-11-20

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2016-11-20

Four Seasons
Italy is the epicenter of the next potential populist "shock." A defeat of the referendum is seen as intensifying the political risk. Renzi has wavered again regarding his political future if the referendum loses.

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Weekly Speculative Positions: Dramatic Spot Currency Moves not Reflected

2016-11-20

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2016-11-20

What is most noticeable about the CFTC Commitment of Traders report for the reporting week ending November 15 is what is not there: Activity.  With the Australian dollar being the sole exception, we are struck by the apparent fact that dramatic spot price action and a what seemed like an impulsive trend move seemed not to be reflected in the futures position adjustments by speculators.   Given the strength of the US dollar after the election,...

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If TPP is Dead…

2016-11-20

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2016-11-20

Tpp
TPP may be dead, but China is spearheading an alternative regional free trade deal. It is not as ambitious as the US-led TPP. China and Russia are eager to re-establish spheres of influence.

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FX Daily, November 17: Consolidation Gives Dollar Heavier Tone

2016-11-17

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2016-11-17

FX Performance, November 17 2016 Movers and Shakers
The US dollar is trading with a heavier bias today as its recent run is consolidated. The euro is trying to snap the eight-day slide that brought it to nearly $1.0665 yesterday, the lows for the year. It is almost as if participant saw the proximity of last year's lows ($1.0460-$1.0525) and decided to pause, perhaps to wait for additional developments, such a Fed Chief's Yellen's testimony before the Joint Economic Committee of Congress.

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Dollar Illiquidity Getting Critical: A $10 Trillion Short Which The Fed Does Not Understand

2016-11-17

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2016-11-17

Dollar Index vs G7 Inflation
In the latest report from ADM ISI’s strategy team, “Dollar Liquidity Threat is Getting Critical and Fed is M.I.A.”, Paul Mylchreest argues that mainstream economic luminaries (like Carmen Reinhart) are finally acknowledging the evolving crisis due to the dollar shortage outside the US, a topic which even the head researcher at the BIS shone a spotlight on yesterday suggesting that the strength of the dollar, not the VIX is the new "fear...

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FX Daily, November 16: The Greenback Remains Resilient

2016-11-16

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2016-11-16

FX Performance, November 16 2016 Movers and Shakers
The US dollar remains bid. It is at its year high against the euro and five-month highs against the Japanese yen. Sterling, which has performed better recently, remains in the trough around 30-year lows. It surge since the election reflects three considerations. The first is December Fed hike. Prior to the election, the market was assessing around a two-thirds chance. Now both the CME and Bloomberg's WIRP estimate the odds above 90%....

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FX Daily, November 15: Investors Catch Breath, Markets Consolidate

2016-11-15

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2016-11-15

FX Performance, November 15 2016 Movers and Shakers
After a dramatic run since the US election, the capital markets are consolidating today. It is a bit too restrained to such a Turn Around Tuesday is unfolding. The euro is struggling to sustain corrective upticks through $1.08, and after a pullback is, the greenback pushed back above the JPY108 level like a beach ball held under water.

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Great Graphic: Euro-the Big Picture

2016-11-14

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2016-11-14

Eurofish
Most economists are focusing on either US monetary policy or US fiscal policy. We focus on the policy mix. After the policy mix, politics is also a weigh on the euro. Our long-term call is for the euro to revisit the lows from 2000.

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Cool Video: Reiterate Bullish Dollar Call on Bloomberg

2016-11-14

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2016-11-14

Bloomberg Marc Chandler
I was on Bloomberg TV this morning to weigh in on the dollar's rally. The US Dollar Index is flirting with the 100 area that has blocked side since last year. In my work, after a big run-up form around 80 in mid 2014, the Dollar Index has been consolidating. I have long anticipated a spring board for another leg up.

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FX Daily, November 14: Dollar Steps Up to Start Week

2016-11-14

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2016-11-14

FX Performance, November 14 2016 Movers and Shakers
The US dollar rally that moved into a higher gear in the second half of last week has begun the new week with a bang. It is up against nearly all the major and emerging market currencies. Even sterling, which last week, managed to eke out modest gains against the greenback is under pressure today.

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FX Weekly Preview: Forces of Movement

2016-11-13

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2016-11-13

US election results accelerated forces that were already present. Interest rates have appeared to bottom, fiscal stimulus in Canada and Japan already evident, and divergence between US and EMU/Japan monetary policy. US stimuli may reach when the economy is already near trend.

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FX Weekly Review, November 07 – November 11: The Trump Reflation Trade

2016-11-13

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2016-11-13

Trade-weighted index Swiss Franc, November 04, 2016
The Swiss Franc Index rose sharply, shortly after the U.S. elections. But then the Trump reflation trade came. Trump may fulfills the wet dreams of many economists. With tax cuts he might extend the U.S. fiscal deficit up to 10% per year. This resulted in: Gains on U.S. stocks, inflows in U.S. Bonds, inflation hedges gold and Swiss Francs.

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