Category Archive: 4) FX Trends

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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(2.4) Purchasing Power Parity: Prefer Export Price Indices against PPI

A technical look at the EURUSD for the week starting Feb 23rd

2015-02-22

by Forexlive

The EURUSD is trading in an up and down trading range. How can traders take advantage of the trading environment. Greg Michalowski of ForexLive.com gives an overview of the non trending environment and outlines how he would trade the market. SUBSCRIBE TO OUR EMAIL LIST! http://forexlive.us7.list-manage.com/… LET’S CONNECT! Google+ ► https://plus.google.com/1026488501294… Facebook ► http://facebook.com/forexlive Twitter …...

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(2.5) Real Effective Exchange Rate, Swiss Franc, Yen and Renminbi

ubs export-weighted exchange rate chf, real effective exchange rate linear trend deviation from trend

The weighted average of country's currency relative to index or basket of other major currencies adjusted for inflation. We explain the Real Effective Exchange Rate for the Franc, the Yen and Renmimbi

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(2.6) CPI-based Real Effective Exchange Rate Since 1965: Yen Still Most Overvalued Currency

Japa Switzerland Norway New Zealand Germany Australia Singapore Italy Canada Franc UK USA United States

If we calculate Real Effective Exchange rates on the base year 1965, the Japanese yen remains the most overvalued currency. This analysis is based on the real effective exchange rate (REER) provided by the Bank of International Settlement (BIS) and a consumer price-index adjusted exchange rate. The real value of the yen is around 50% higher than 1965, the same applies to the Swiss franc.

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Marc Chandler on the Negative Interest Rate Trend in Europe

2015-02-20

by Marc Chandler

Feb 20 – Cris Sheridan welcomes Marc Chandler, author and Global Head of Currency Strategy at Brown Brothers Harriman. Marc discusses the reasons behind the negative interest rate trend in many European countries. http://www.financialsense.com/subscribe

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Forex technical trading (VIDEO): AUDUSD inches higher, but approaches strong resistance

2015-02-17

by Forexlive

The AUDUSD was supported in trading today by minutes from the RBA meeting which were less dovish than expectations. Favorable technicals also played a part in the pairs move to the upside in trading today. Can that momentum continue into the new trading session? Greg Michalowski, director of technical analysis and trader education will outline …

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(2.7) The Most Complete Real Effective FX Rate Comparison

In August 2013 the Bruegel blog offered one of the best comparison of long-term real effective exchange rates (REER). The data is CPI based and therefore not as good as the producer price index (PPI) that reflects tradable goods better. However the data is huge with three different sources - BIS, World Bank, Eurostat, OECD and Bruegel. The data indicates how the real value of the currencies of China and many other Emerging Markets (EM) have...

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ForexLive: A technical look at the forex week ahead (Feb 16th, 2015)

2015-02-16

by Forexlive

What does the technical picture look like for the major currency pairs for the week starting Feb 16th. Greg Michalowski of ForexLive.com shows the levels to eye in trading for the week and explains why..

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(3) Inflation, Central Banks and Interest Rates

In this chapter we connect three related concepts: inflation, central banks and interest rates.

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(3.1) FX Theory: Interest Rate Parity

real interest rates euro uk czech us turkey south africa india mexico norway canda hungary japan switzerland israel korea sweden indonesia china new zealand brazil russia poland australia chile

The interest rate parity gives a mathematical explanation for the purchasing power parity and real effective interest rates

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(4) The Main FX Trading Strategies

Currency Intervention and Mean Reversion

Carry Trades, Central Bank Interventions, Fundamental Data, mean reversion, Momentum Trades, Overshooting, trend following

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(5) The Balance of Payments Model

The Balance of Payments is the sum of current and capital account. The Balance of Payments model states that a currency appreciate when the Balance of Payments is positive. We give an explanation in around 400 words, that clarifies the relationships.

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(5.1) FX Theory: The Trade Surplus and the Real Exchange Rate Mean Reversion

Trade and Current Account Deficit United States 1980-2012

George Dorgan explains why currencies of countries with trade surpluses must appreciate over the long-term. Thanks to these surpluses, inflation and costs of companies rise more slowly than in other countries. In Forex a mean reversion does not exist, but only an inflation-adjusted reversion to the mean: a real exchange rate mean reversion or in short the "real mean reversion."

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(5.2) FX Rates, the Balance of Payments Model and Central Bank Interventions

We will apply the balance of payments model for determining FX rate movements and FX interventions by central banks.

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(5.3) FX Theory: Penn Effect and Balassa Samuelson Effect

ULC Labor Labour Costs Switzerland vs. Greece, Italy, Spain, France, Germany

George Dorgan extends the previous discussion on trade surplus countries. Now he explains the Penn and the Balassa-Samuelson Effect. He applies these principles to Germany, to Greece and to Switzerland.

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Forex technical trading (VIDEO): AUDUSD consolidation continues. Looking for a break.

2015-02-10

by Forexlive

Greg MIchalowski, director of client education and technical analysis at Forexlive.com, takes a look at the AUDUSD from a technical perspective. The pair has been consolidating in a narrow trading range. Traders are looking for the break and momentum on a break. SUBSCRIBE TO OUR EMAIL LIST! http://forexlive.us7.list-manage.com/… LET’S CONNECT! Google+ ► https://plus.google.com/1026488501294… Facebook ► …

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(5.4) The Relationship between Current Accounts and Savings

Private savings finance public deficit and current account surpluses. Important for understanding the euro crisis and the drivers of government bond yields.

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(5.5) FX Theory: Currencies of Countries with High Economic Freedom, Immigration and Savings Must Appreciate

Economic freedom, immigration and high savings are main drivers for strong currencies. Switzerland, Singapore, Norway, Sweden and in the future even Germany are examples. Strangely most are in Europe.

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Welcome to the new ForexLive!

2015-02-09

by Forexlive

Welcome to the new ForexLive! We are proud to launch our new ForexLive website. Our goal in creating this new site is to focus on speed, freshen up the look and prepare for the future with the ability to add and serve our growing customer base. We hope you like what you see. Please feel … Continue reading »

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Forex Technical Analysis (VIDEO): A technical preview of the Forex week ahead (Feb 9, 2015)

2015-02-09

by Forexlive

In this video, Greg Michalowski looks at the technicals that are shaping the major currency pairs for the current trading week. Included are technical looks at the following currency pairs. EURUSD USDJPY GBPUSD USDCHF USDCAD AUDUSD and NZDUSD SUBSCRIBE TO OUR EMAIL LIST! http://forexlive.us7.list-manage.com/… LET’S CONNECT! Google+ ► https://plus.google.com/1026488501294… Facebook ► http://facebook.com/forexlive Twitter ►...

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