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, May 18: Risk Appetites Return Bigly

2021-05-18

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2021-05-18

In Asia, equities markets rallied strongly, led by the more than 5% gain in Taiwan, the most in over a year as Monday's 3% drop was more than overcome. The Nikkei gained more than 2% despite the deeper than expected contraction in Q1 GDP. Hong Kong, South Korea, and India also rose more than a 1% gain as tech came roaring back.

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FX Daily, May 17: US and Europe may Announce Tariff Truce

2021-05-17

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2021-05-17

There are two general developments as the busy week gets underway. First, despite accelerated price readings in the US (CPI, PPI, import prices, and University of Michigan survey), US rates are soft. The 10-year yield is near 1.61% after rising to 1.70% after the CPI surprise last week.

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FX Daily, May 14: Softer Yields = Softer Dollar

2021-05-14

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2021-05-14

The surge in consumer prices reported on Wednesday saw rates jump and the dollar push higher. Stronger than expected producer prices yesterday, and news of wage increases (average 10%) at Mcdonalds and for 75,000 people Amazon wants to hire, saw rates ease and the dollar's upside momentum stall.

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FX Daily, May 13: Long Lost Bond Vigilantes Sighted, Gives Dollar Fillip

2021-05-13

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2021-05-13

It is as if the bond vigilantes were pushed too far. US inflation is accelerating more than expected, and it cannot all be attributed to the base effect, and the Federal Reserve, to many investors, is tone-deaf. With powerful fiscal stimulus, nominal growth above 10%, and the economy re-opening, albeit unevenly, does the monetary accelerator need to be fully engaged?

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FX Daily, May 12: The Dollar Stabilizes but Stocks, Not So Much

2021-05-12

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2021-05-12

The markets remain on edge. Asia Pacific and US equities have yet to find stable footing, and inflation fears are elevated. The foreign exchange market has turned quiet as the dollar consolidates its recent losses.

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FX Daily, May 11: Stocks Slide but Little Demand for Safe Havens

2021-05-11

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2021-05-11

The sell-off in US shares yesterday has triggered sharp global losses today, and there is no flight into fixed income as benchmark yields are higher across the board. Nor is the dollar serving as much as a safe haven. It is mostly softer against the major currencies.

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FX Daily, May 10: The Dollar Remains on the Defensive

2021-05-10

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2021-05-10

Last week's cyberattack on the largest US gasoline pipeline continues to lift oil and gasoline prices. The June gasoline futures gapped higher to extend last week's 2.4% gain but has subsequently moved lower to enter the gap. 

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The Dollar and the Fed

2021-05-08

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2021-05-08

One of the stark developments since the initial shock of the pandemic has been the aggressiveness of the US monetary and fiscal response. This was also true in dealing with the Great Financial Crisis. The divergence then and now had shaped the investment climate.

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The Dollar can Build on the Pre-Weekend Gains

2021-05-02

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2021-05-02

The US dollar traded heavily most of last week but rebounded ahead of the weekend, with some month-end flows impacting.  The Japanese yen was a notable exception.  The rise in US yields helped lift the greenback nearly a percent against the yen.  The Fed's standpat stance in light of the surging economy and signals the Norwegian central bank and the Bank of Canada seemed dovish.  The contrast carried the Norwegian krone and Canadian dollar to new...

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FX Daily, April 29: US GDP: The V

2021-04-29

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2021-04-29

Overview:  The market's initial reaction to the Federal Reserve statement and the press conference was that it was dovish: the 10-year yield slipped, and the dollar was sold to new lows.  In fact, the two countries that appear to be ahead of the curve among high-income countries, Canada and Norway, saw their currencies rally to new three-year highs.

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FX Daily, April 28: Biden and Powell are Center Stage

2021-04-28

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2021-04-28

Overview: It appears that the backing up of US yields is giving the dollar a better tone and challenging the Eurosystem, which has stepped up its bond purchases.  The US 10-year yield is around 1.65%, roughly a two-week high and back above the 20-day moving average. 

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FX Daily, April 27: Markets Mark Time Ahead of Fed

2021-04-27

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2021-04-27

Short-covering ahead of the FOMC's outcome tomorrow appears to be lending the US dollar support today. It has extended yesterday's gains against the euro, sterling, and yen.  Among emerging market currencies, the Turkish lira, along with the South Korean won and Taiwanese dollar, lead the few advancers.

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FX Daily, April 26: Big Week Begins Quietly, with the Greenback Still Under Pressure

2021-04-26

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2021-04-26

Overview: What promises to be a notable week has begun off quietly: the US, EMU, and South Korea report Q1 GDP.   The eurozone also provides its first estimate of April inflation.  Corporate earnings feature tech and financial firms.  Equities are mostly firmer in the Asia Pacific region and Europe.

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FX Daily, April 23: Greenback Slips into the Weekend

2021-04-23

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2021-04-23

Overview:  Many narratives link the prospect of higher capital gains tax on about a third of 1% of Americans as the catalyst for losses in US equities yesterday (and Bitcoin) and weakness in some global shares today.  Of the large markets in the Asia Pacific region, only Japan, which is reimposing a formal emergency in Tokyo, Osaka, and two other prefectures, fell. 

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FX Daily, April 20: Market has Second Thoughts about Timing of First Fed Hike

2021-04-20

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2021-04-20

Overview:  Even as US yields edge higher, the dollar struggles. With the 10-year Treasury yields now at 1.62%, nine basis points above last week's lows, the greenback has turned mixed against the major currencies. After briefly slipping below JPY108, the dollar has recovered to around JPY108.55. 

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FX Daily, April 12: Capital Markets Look for Direction

2021-04-12

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2021-04-12

Overview: Risk appetites have not returned from the weekend.  Equities are heavy, and bond yields softer.  The dollar is drifting lower in Europe.  China's unusually candid admission of the shortcomings of its vaccine and record new cases in India saw all the equity markets in the region fall.  Only South Korea and Taiwan escaped the carnage that saw the Indian market tumble 3.5%. 

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FX Daily, April 8: Calm Capital Markets See the Dollar Drift

2021-04-08

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2021-04-08

Overview:  Global stocks are moving higher today.  Fears of a new lockdown in Tokyo amid rising covid cases weighed on Japanese stocks, a notable exception as the MSCI Asia Pacific Index rose for its fifth session of the past six.  Europe's Dow Jones Stoxx 600 is edging to new record highs today and is advancing for its fifth session of the past seven. 

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FX Daily, April 5: Market Pushes First Rate Hike into 2022

2021-04-05

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2021-04-05

Overview: Many financial centers in Asia and Europe remain closed for the extended holiday. Although several markets that were open were higher in the Asia Pacific region, India was an exception as a record contagion sent stocks down the most in five weeks. US futures are pointing higher, led by the Dow, while the NASDAQ lags.

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April Monthly

2021-04-02

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2021-04-02

Four major forces shaped the investment climate in the first quarter:  the evolution of the virus and the rollout of the vaccine, the rising long-term interest rates driven by higher oil prices, America’s large fiscal stimulus, and optimism about the outlook, a sharp divergence between the US and other high-income countries, and a recovery in the US dollar after sliding in November and December 2020.

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FX Daily, March 30: US Yields Push Higher, Lifting the Greenback Especially Against the Euro and Yen

2021-03-30

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2021-03-30

The US 10-year yield is at new highs since January 2020, pressing above 1.77% and helping pull up global yields today.   European benchmarks yields are up 4-5 bp, and the Antipodean yields jump 8-9 bp.  The impact on equities has been minor, and the talk is still about the unwinding of Archegos Capital. 

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