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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Euro Shrugs off European Banking Woes

2017-06-06

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2017-06-06

Spain's Banco Popular is scrambling ahead of its meeting with the ECB tomorrow; shares are around 50% in three sessions. Italy has two banks that may see the same deal Monte Paschi negotiated with the EU. Portugal banks are still putting loan loss reserves and provisions aside.

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Great Graphic: Don’t be Misled by Sterling Stability, Investors are Concerned

2017-06-06

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2017-06-06

The Great Graphic, created on Bloomberg, shows the options skew (three-month 25 delta risk reversal) in the white line, and sterling is the yellow line. The takeaway is that the market appears to be more nervous than the relatively firm sterling in the spot market suggests. Typically, one might expect those with sterling exposure to sell calls (and receive funds) rather than buy puts (new expenditure).

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FX Daily, June 05: US Dollar Starts Important Week Mostly Stable to Higher

2017-06-05

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2017-06-05

The US dollar is beginning what promises to be an important week on a steady to firmer note against most of the major currencies. It is a holiday in parts of Europe (e.g.,m Germany and Switzerland). Although excitement is not until Thursday's ECB meeting, UK election, and the testimony of former US FBI Director Comey, there are several developments today to note.

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Weekly Speculative Positions (as of May 30): Speculators make Small Adjustments, but Like that Peso

2017-06-05

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2017-06-05

swiss franc june 05
The net short CHF position has fallen from 19.8 short to 18.5K contracts short (against USD). But the major movement was that speculators are net long the euro now and not the dollar any more. This implies that they are also long Euro against CHF. Speculators in the future market made mostly minor adjustment in the gross positioning in the currencies.

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FX Weekly Preview: ECB Meeting and UK Election Key Drivers in Week Ahead

2017-06-05

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2017-06-05

ECB may take a baby step toward the exit of extraordinary monetary policy by confirming rates are unlikely to be cut further and the risks are roughly balanced. UK election is coming down to the wire. In the US, former FBI director Comey is set to testify, and leaks of two Fed appointments overshadow mostly second-tier economic data.

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Great Graphic: Iron Ore and the Australian Dollar

2017-06-04

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2017-06-04

This Great Graphic, from Bloomberg, shows the correlation between the price of iron ore and the Australian dollar on a rolling 60-day basis over the past year. The correlation is a little more than 0.81. The relationship is the tightest since last August. This is purely directional.

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FX Weekly Review, May 29 – June 03: Dollar Dogged by Disappointing Data

2017-06-04

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2017-06-04

EUR/CHF and USD/CHF, June 03
While the Euro traded in the range between 1.08 and 1.09, the dollar declined by nearly 3%. The technical indicators warn that the US dollar is stretched, but the combination of disappointing auto sales and jobs report may deny it the interest rate support needed to facilitate a resumption of the bull market.

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How to listen to a squawk and something else at the same time

2017-06-03

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Livesquawk: https://www.livesquawk.com/sign-up For two weeks free, sign up with the promo code: FXLive Regular fee: $60/month Degath’s Ducker: http://degathsducker.weebly.com/ Here’s my problem: I love trading with a squawk. I have to have one. It’s like an extra set of eyes on the world that alert you whenever something is happening. The problem is that I …

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Great Graphic: US Rate Curve and the Euro

2017-06-03

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2017-06-03

This Great Graphic was created on Bloomberg. It shows two times series. The yellow line and the left-hand scale show the euro's exchange rate against the dollar for the past year. The white line depicts the spread between the US two-year and 10-year yield.

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Drop in the US Unemployment Rate Not Sufficient to Mask Disappointing Report

2017-06-02

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2017-06-02

Poor jobs growth won't challenge June hike expectations but September and balance sheet. Little positive in today's report. Drop in unemployment explained by drop in participation rate. Trade deficit was larger than expected, which may point to slower Q2 growth.

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FX Daily, June 02: Dollar Marks Time Ahead of US Jobs Report

2017-06-02

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2017-06-02

The foreign exchange market is becalmed, leaving the US dollar narrowly mixed. The euro has been confined to less than a 20-pip range through the Asian session and most of the European morning. The news stream is light. The US withdrawal from the Paris Accord may have garnered the headlines, but as a market force, it is difficult to detect the immediate impact.

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FX Daily, June 01: Greenback Steadies at Lower Levels, Sterling Struggles

2017-06-01

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2017-06-01

The US dollar is mostly firmer against the major currencies. It is consolidating yesterday's losses more than staging much of a recovery. Even sterling, where a YouGov poll has the Tory lead at three percentage points, down from seven previously, is above yesterday's lows. On the other hand, even strong data from Japan did not drive the yen higher.

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The US and German Relationship

2017-05-31

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2017-05-31

US and German relations may be strained, but this is not unprecedented. It has been fanned by Trump and Merkel's rhetoric. A European sphere of influence seems to have been the force pushing in that direction.

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FX Daily, May 31: Sterling Takes it On the Chin

2017-05-31

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2017-05-31

Projections showing that the UK Tories could lose their outright majority in Parliament in next week's election spurred sterling sales, which snapped a two-day advance.  Polls at the end of last week showed a sharp narrowing of the contest, and this saw sterling shed 1.3% last Thursday and Friday. 

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What Happened Monday

2017-05-31

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2017-05-31

No impact from the latest North Korean missile test. Polls suggest Tories still ahead for the June 8 election. Prospects of an Italian election this year weighed on Italian stocks and bonds.

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FX Daily, May 30: Mixed Dollar as Market Awaits Preliminary EMU CPI and US Jobs

2017-05-30

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2017-05-30

With the backdrop of US interest rates unable to get much traction, despite the strong probability of another Fed rate hike in a couple of weeks, the third since last November election, the US dollar mixed today. The chief story today, though, is not the greenback but the euro. The euro is trading heavily for the fourth session.

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Weekly Speculative Positions (as of May 23): Speculators Remain Bearish the Dollar and Bullish Bonds

2017-05-29

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2017-05-29

swiss franc may 29
The net short CHF position has fallen from 21.1 short to 19.8K contracts short (against USD). But the major movement was that speculators are net long the euro now and not the dollar any more. This implies that they are also long Euro against CHF. In the CFTC reporting week ending May 23 speculators in the futures market continued to largely position themselves for further dollar weakness.

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FX Weekly Preview: Twin Peaks: US Economy and EMU Inflation

2017-05-29

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2017-05-29

US economic data, culminating with the employment report, should be consistent with a re-acceleration of the world's largest economy after a typical slowdown in Q1. Eurozone price pressures likely eased considerably in May. For the UK economy, the bounce in April was a fluke, and gradual slowdown continues. Japanese investors have bought foreign bonds for three weeks in a row, which is the longest streak in six months.

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FX Weekly Review, May 22 – 27: Is the Dollar Going To Turn?

2017-05-29

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2017-05-29

EUR/CHF and USD/CHF, May 27
The Swiss Franc recovered a lot of the losses that came with the French elections. That political event was mostly driven by speculators that will close their positions. We expected the EUR to trade around 1.07 to 1.0750 CHF in some time.

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Emerging Markets: What has Changed

2017-05-27

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2017-05-27

Moody's downgraded China's rating from Aa3 to A1 with stable outlook. Reports suggest that the PBOC has informed local banks that it is changing the way it sets the daily fix. Moody's downgraded Hong Kong’s rating to Aa2 from Aa1 with stable outlook. Philippine President Duterte declared martial law on Mindanao island. Egypt's central bank unexpectedly hiked rates by 200 bp. S&P moved the outlook on Bolivia’s BB rating from stable to negative....

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