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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Great Graphic: Aussie Approaches Two-Month Uptrend

2016-07-20

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2016-07-20

Australian dollar is the second heaviest currency this week after a key downside reversal at the end of last week. It is approaching an uptrend line near $0.7450. Many perceive an increased likelihood that the RBA eases and many are reassessing chance of a Fed hike later this year.

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FX Daily, July 19: Dollar-Bloc Tumbles, but Euro and Yen Little Changed

2016-07-19

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2016-07-19

The US dollar is sporting a firmer profile today, but it is not the driver. Heightened speculation that Australia and New Zealand may cut interest rates next month is pushing those respective currencies more than 1% lower today.

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Three ways Donald Trump could roil markets at the Republican National Convention

2016-07-19

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Adam Button looks at the potential impacts of Donald Trump at the 2016 Republican National Convention. What impacts will the RNC have in the foreign exchange market, stocks and for the economy. Donald Trump’s speech is the key point for the 2016 RNC but there are other drivers and things to watch as well. Visit …

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Dollar Bull Case Intact: It is All About the Perspective

2016-07-19

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2016-07-19

Our bullish dollar outlook was based on divergence and we judge it to still be intact.The Dollar Index has been trading broadly sideways since March 2015, but never did more than a minimum retacement of its arlier rally. The Dollar index is at it highest level since March today.

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European Court of Justice Ruling Weighs on Italian Banks

2016-07-19

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2016-07-19

ECJ uphold principle of bailing in junior creditors before the use of public funds. Italian banks shares snap a three-day advance. The EBA/ECB stress test results at the end of next week are the next big event.

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FX Daily, July 18: Coup in Turkey Repulsed, Risk-Appetites Return

2016-07-18

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2016-07-18

The US dollar and the yen are trading heavy, while risk assets, including emerging markets, and the Turkish lira, have jumped. Sterling is the strongest of the majors. It is up about 0.5% (~$1.6365), helped by the opportunity of GBP23.4 bln foreign direct investment and comments from a hawkish member of the MPC suggesting not everyone is onboard necessarily for a rate cut next month.

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Squaring the Circle: Can Article 7 be Used to Force Article 50?

2016-07-18

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2016-07-18

Article 7 would suspend the UK's EU voting rights on grounds it is not negotiating in good faith by delaying the triggering of Article 50. The U.S. debated what "is" means, now investors are trying to figure out what May means. Although sterling has stabilized, interest rate differentials have not.

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Some Thoughts on Turkey

2016-07-18

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2016-07-18

INTRODUCTION After last Friday’s failed coup attempt in Turkey, a measure of calm has returned to global markets. We did not think Turkish developments have wide-reaching implications for EM assets, but we do remain very negative on Turkish assets in the wake of the coup and ongoing political uncertainty.

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FX Weekly Preview: EMU Returns to Center Stage in the Week Ahead

2016-07-17

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2016-07-17

Key event in Europe is not on many calendars--it is a ruling by the European Court of Justice. UK government and Tory Party stabilizing, leaving the Labour Party in disarray. US economy appears to have accelerated into the end of Q2. BOJ's meeting at the end of the month.

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Speculative Sentiment Shifts

2016-07-16

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2016-07-16

The combination of a robust US jobs report, speculation of bolder action by Japan, the possibility that the ECB drops the capital key to overcome the ostensible shortage of some core bonds (e.g. German bunds), and the anticipation of easier BOE policy appears to have generated a change in sentiment among speculators in the currency futures market.

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FX Weekly Review, July 11 – July 15: It is not About the Dollar, but About Other Currencies

2016-07-16

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2016-07-16

Our weekly review of currency movements, with focus on the Swiss franc. This week: The US dollar is easily the most traded currency, and despite the plethora of other currencies, it is on one side of nearly 90% of all trades. Yet the movement in the foreign exchange market presently is not so much driven by the dollar as it is by other currencies.

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The technicals are talking to us in the EURUSD. What are they saying?

2016-07-15

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The EURUSD is trading in a narrow trading range on the daily and the hourly chart. What does that tell us about the pair and what we can expect in trading in the new future?

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Great Graphic: Equities Since Brexit

2016-07-15

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2016-07-15

Since the UK voted to leave the EU, emerging market equities have outperformed equities from the developed markets. This Great Graphic, composed on Bloomberg, shows the MSCI Emerging Market equities (yellow line) and the MSCI World Index of developed equities (white line).

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FX Daily, July 15: Sterling and Yen Remain Key Drivers in FX

2016-07-15

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2016-07-15

The US dollar is broadly mixed against the major currencies. The Swiss franc's 0.25% gain puts it at the top of the board, after sterling's earlier gains were largely unwound in late-morning turnover. The yen is the weakest major; extending its loss by 0.6%, to bring the weekly decline to more than 5%. The pre-referendum result high for the dollar was near JPY106.85. Today's high has been about JPY106.30. In emerging markets, we note that the...

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FX Daily, July 14: Will BOE Ease on May Day?

2016-07-14

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2016-07-14

Theresa May
After a nearly three weeks of turmoil following the UK referendum, there is now a sense of order returning to UK politics. Two elements of the new government are particularly relevant. First, May demonstrates strategic prowess by putting those like Johnson and Davis, who campaigned for Brexit, to lead the negotiations with the EU, while putting Tories who favored remaining in the EU in the internal ministries.

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Great Graphic: If You Think Sterling has Bottomed, Where may it Go?

2016-07-14

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2016-07-14

Many think sterling has bottomed. A number of technical factors point to potential toward $1.42. Fundamental considerations do not appear as supportive as technicals.

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BOE Surprises by Doing Nothing, but Tips August Action

2016-07-14

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2016-07-14

BOE neither cut rates not announced a new asset purchase plan. Sterling rallied hard. However, the BOE indicated an August ease and I look for sterling to pare knee-jerk gains.

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FX Daily, July 13: Sterling and Yen Momentum Slows

2016-07-13

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2016-07-13

The two main developments in the foreign exchange market this week in recent days has been the opposite of what has transpired over the past several weeks. Sterling moved higher quickly. The yen moved down just as fast. Over the past five sessions through late-morning levels, sterling has gained 2.5% while the yen has shed 2.8%.

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Three Developments in Spain

2016-07-13

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2016-07-13

Favorable initial ruling for Spanish banks that overcharged on mortgages. The EC may be lenient on Spain (and Portugal) for the excessive deficits in 2015. There is a window of opportunity for Rajoy to form a minority government.

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FX Daily, July 12: Easing Political Uncertainty Encourages Animal Spirits

2016-07-13

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2016-07-13

Further risk appetite means rising euro and weaker CHF. The SNB typically sustains such risk appetite phases with smaller FX interventions of around 300 million per day. Sterling is leading the new appetite for risk as one element of political uncertainty has been lifted. It is moving higher for the third consecutive session today; advancing by more than 1.5 cents to reach $1.3180.

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