Category Archive: FX

Main Author George Dorgan
George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on SeekingAlpha.com and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.

FX Daily, August 17: Euro Softens on Crosses, Treasuries Stabilize

The US dollar had steadied after softening in the North American afternoon yesterday when the dissolution of President Trump's business councils as a series of executives stepped down.  The FOMC minutes added more fuel to the move. 

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FX Daily, August 16: Swiss Franc and Yen Remain Heavy as New Distractions Replace DPRK

The Japanese yen and Swiss franc remain heavy as the markets continueto shift away from the geopolitical risks. A return to the macroeconomic agenda is being deterred by new drama from Washington and reports suggesting that ECB's Draghi will not be discussing the central bank's monetary policy course at Jackson Hole confab, which will take place next week.

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FX Daily, August 15: Greenback Firms, Encouraged by Dudley and Ebbing of Tensions

NY Fed President Dudley appears to have stolen any potential thunder in the July FOMC minutes that will be released tomorrow. While we put more emphasis on today's US retail sales data and the August Fed surveys, many others argued that the minutes were the key report this week.

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FX Daily, August 14: Sigh of Relief Weighs on Yen and Gold, while Lifting Equities and the Dollar

The lack of new antagonisms over the weekend between the US and North Korea has prompted the markets to react accordingly. Already before the weekend, we detected some signs that at least some market participants had begun looking past the dramatic rhetoric.

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FX Weekly Preview: Synthetic FX View — Macro and Prices

Economic data due out are unlikely to change macro views. Swiss franc's price action suggests some return to "normalcy" despite rhetoric remaining elevated. Sterling's 3.25 cent drop against the dollar looks over.

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FX Daily, August 11: Geopolitical Tensions Remain Elevated into the Weekend

There has been no apparent attempt by either North Korea or the United States to ease the rhetorical flourishes that have made global investors nervous. Risk assets were liquidated, and the funding currencies, particularly the Japanese yen and Swiss franc were bought back. The yen gained nearly 1.6% this week, ahead of the US session, while the Swiss franc gained 1.3%.

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FX Daily, August 10: Tensions Remain Elevated, Dollar Firms

It is difficult to walk back the saber-rattling rhetoric. US Secretary of State Tillerson tried to defuse the situation, which had appeared to ease nerves in North America yesterday. However, references to the modernization of US nuclear forces, a multi-year project begun last year, spurred a fresh threat by North Korea to fire four intermediate range missiles near Guam in week's time.

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FX Daily, August 09: North Korea lets EUR/CHF Collapse

The bellicose rhetoric from the US and North Korean officials is the main driver today. We would qualify that assessment by noting that first, the market moves are rather modest, suggesting a low-level anxiety among investors. Second, pre-existing trends have mostly been extended. Turning to Asia first, the Korea's equity market fell 1.1%. The Kospi has fallen for the past two weeks (~2.2%).

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Great Graphic: Unemployment by Education Level

The US reports the monthly jobs data tomorrow.  The unemployment rate stood at 4.4% in June, after finishing last year at 4.7%.  At the end of 2015 was 5.0%.  Some economists expect the unemployment rate to have slipped to 4.3% in July. Recall that this measure (U-3) of unemployment counts those who do not have a job but are looking for one. 

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FX Daily, August 07: Outlaw Mondays

The US dollar is narrowly mixed to start the new week. Two main developments stand out. First, the dollar-bloc currencies are trading heavily. The Australian dollar is pushing lower for the fifth consecutive session. The greenback is advancing against the Canadian dollar for the sixth consecutive session. The New Zealand dollar is weaker for the fifth time in six sessions.

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Weekly Speculative Positions (as of August 01): Speculators Press Ahead with Dollar-Bloc Currencies, but Hesitate with Euro and Yen

The net speculative CHF position has risen from -1.5K short to 1.4K contracts long (against USD). In the CFTC reporting week ending August 1, speculators in the futures market continued to build long exposure in the dollar-bloc currencies. In the three sessions after the reporting period closed, the dollar-bloc currencies have traded heavily.

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FX Weekly Preview: Moving Toward September

The technical and fundamental case for the euro has weakened. Rate differentials have begun moving back in the US favor. France's Macron and Japan's Abe have sunk in the polls lower than Trump.

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FX Weekly Review, July 31 – August 05: Second Week of Strong CHF Losses

The Swiss Franc entered the second week of stronger losses. While the euro gained 4% last week, the dollar appreciated against the Swiss Franc 2% during this week.

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Great Graphic: Italy-It is Not Just about Legacy

A little while back I was part of a small exchange of views on twitter. It was about Italy. I was arguing against a claim that Italy's woes are all about its past fiscal excesses. It is not just about about Italy's legacy.

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Bank of England Crushes Sterling

Sterling reached a new 11-month high against the dollar earlier today, but the dovish take away from the Bank of England has seen sterling reverse lower. It has now fallen below the previous day's low, and a close below there (~$1.3190) would confirm the bearish key reversal pattern. Support near the week's low just below $1.3100 is holding, and if that goes, the $1.30 level can be tested. A break of $1.2930, the low from the second half of July...

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Constructive US Jobs, but Where Do the Euro Bulls make a Stand?

The US created 209k jobs in July and jobs growth in June was revised higher (+9k) to 231k. The underemployment rate was unchanged at 8.6%. The unemployment rate ticked down to 4.3%, matching the cyclical low set in May. This is all the more impressive because the participation rate also ticked up (62.9% from 62.8%).

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FX Daily, August 04: Does the Employment Report Matter?

There are some chunky option strikes that could come into play today. There are 920 mln euros struck at $1.1850 that expire today. There are A$523 mln struck at $0.7950 expiring today. There are $680 mln struck at CAD1.2550 that will be cut.

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FX Daily, August 03: Dollar-Bloc Currencies Turning, but Euro Downticks Limited

The high-flying dollar-bloc currencies may be a preliminary sign market change. The US dollar is gaining on the Canadian dollar for the fourth consecutive session. It is probing resistance we identified in the $1.2620 area. The US dollar has not traded above its 20-day moving average since the Fed hiked rates on June 14. It is found today near CAD1.2625.

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Cool Video: Dollar Drivers on Bloomberg

There were three talking points. First was the observation that while the President took credit for the record stock market, the strength of the economy, the low unemployment rate, and business confidence, there was no mention of the dollar, which poised to close lower for its seventh consecutive month.

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