Tag Archive: $CNY

FX Daily, May 10: Markets Adjust to North Korean Threat, Fifth Fall in US Oil Inventories and Trump Drama

Investors absorbed a few developments that might have been disruptive for the markets with little fanfare. North Korea's ambassador to the UK warned that his country would go ahead with its sixth nuclear test, as South Korea elected a new president who wants to reduce tensions on the peninsula.

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FX Daily, May 08: Euro Bought on Rumor, Sold on Fact

The euro initially opened higher in Asia following confirmation that Macron was elected the next president of France, but quickly fell below $1.0960 before bouncing back toward $1.10 only to be sold again in early Europe below the pre-weekend low near $1.0950. A break now of $1.0930 could signal a return to the lower end of the range seen since the first round of the French election near $1.0850-$1.0870.

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‘Dollar’ ‘Improvement’

According to the headline TIC statistics, foreign central banks have in the past six months sold the fewest UST’s since the 6-month period ended November 2015. That may indicate an easing of “dollar” pressure in the private markets due to “reflation” sentiment.

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More Thinking about Trade as Pence and Ross Head to Tokyo

Pence and Ross may "feel out" Abe for interest in a bilateral trade agreement. The US enjoys a small trade surplus with countries it has free-trade agreements. Ownership-based framework of the current account and value-added trade suggest the US trade imbalance is not a significant problem.

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FX Daily, April 17: Markets Trying to Stabilize in Holiday-Thin Activity

Financial centers in Europe are closed for the extended Easter holiday. Australian and New Zealand markets were also closed. The drop in US 10-year Treasury yields in early Asia, with a brief push below 2.20%, appears to have kept the dollar under pressure. As the North American market prepares to open, the dollar is softer against the all major currencies and many emerging market currencies.

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FX Weekly Preview: What to Watch in the Week Ahead

Many observers misunderstood US President Trump's "American First" rhetoric. Trump's earlier writings show that this is not a reference to the 1940s effort to keep the US out of WWII, with its isolationist tint. Rather, Trump's use goes back to the original use by President Harding in the 1920s. It was a rejection of the Wilsonian multilateralism (e.g. League of Nations) and a robust defense of unilateralism.

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FX Daily, April 05: Dialing it Up on Hump Day

he dollar is practically unchanged against the euro and yen in the first two sessions of the week. The pace can be expected to pick up starting Wednesday. Although the euro slipped through $1.0650, it was not sustained, and on Monday and Tuesday, the euro finished near its highs.

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Inclusion in SDR Does Not Spur Official Demand for the Yuan

China's share of global reserves is in line with expectations prior to its inclusion in the SDR. Three factors influencing allocated reserves - valuation, portfolio decisions, and China's gradual inclusion in allocated reserves. The Swiss franc's as a reserve asset diminished, but the "other" category appeared robust.

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FX Weekly Preview: The Macro Backdrop at the Start of the Second Quarter

The macroeconomic fundamentals have not changed much in the first three months of the year. The US growth remains near trend, the labor market continues to improve gradually, both headline and core inflation remain firm, and the Federal Reserve remains on course to hike rates at least a couple more times this year, even though the market is skeptical. The uncertainty surrounding US fiscal has not been lifted, and it may not be several more months.

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Pressure, Sure, But From Where?

It may just be that in life you have to get used to disappointment. Though not for lack of trying, I have spent a great deal of time over the years intending to piece together exactly what happened on days like October 15, 2014. The official explanation is an obvious whitewash, one so haphazard that I doubt it will ever be referred to again outside of ridicule.

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Time, The Biggest Risk

If there is still no current or present indication of rising economic fortunes, and there isn’t, then the “reflation” idea turns instead to what might be different this time as compared to the others. In 2013 and 2014, it was QE3 and particularly the intended effects (open ended and faster paced, a bigger commitment by the Fed to purportedly do whatever it took) upon expectations that supposedly set it apart from the failures of QE’s 1 and 2. This...

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FX Daily, March 08: Dollar Bid as Rates Firm

The US dollar is moving higher against nearly all the other major foreign currencies today. As far as we can tell, the driving force remains interested rate considerations. US rates are rising in absolute terms and about Europe and Japan. The US 10-year yield is moving above the downtrend that has been in place since the day after the Fed hiked rates last December.

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FX Weekly Preview: Four Sets of Questions and Tentative Answers for the Week Ahead

The week ahead features the ECB meeting and the US February jobs report. The Reserve Bank of Australia meets, Europe reports industrial production, Japan reports January current account figures, and China reports its latest inflation and lending figures. We frame this week's discussion of the drivers in terms of four sets of questions and offer some tentative answers.

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FX Daily, February 24: Anxiety? What Anxiety?

The US dollar is finishing the week on a mixed note in choppy activity in narrow ranges. It is an apt way to finish this week, which has been largely directionless as investors wait for fresh incentives, and are especially looking toward Trump's speech to a joint session of Congress next week.

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Great Graphic: Mexico and China Unit Labor Costs

Mexico has been gaining competitiveness over China before last year's depreciation of the peso. The depreciation of the peso, and other US actions can contribute to the destabilization of Mexico. An economically prosperous and stable Mexico has long been understood to be in the US interest.

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FX Weekly Preview: Macro Forces Underpin Dollar, Equities and Yields

Odds of a March Fed hike edged up last week, and Q4 GDP figures were revised higher. Many continue to expect the new US Administration to pursue pro-growth tax reform, deregulation and infrastructure spending. Although many other high income countries are growing, near trend divergence of monetary policy continues.

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Cool Video: CNBC’s Power Lunch-China and Mexico

Two central banks were particularly active today. Chinese officials appear to be engineering short squeeze that has lifted the yuan 1.2% over the past two sessions. While this does not sound like much, it is a record two-day move, for the still closely managed currency.

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FX Daily, January 06: Dollar Consolidates Losses, Peso Firms while Yuan Reverses

I am reading a lot about the pound in 2017 which is likely to be as volatile as in 2016. But the Franc is a harder beast to predict. Loosely tracking the euro but subject to its own rules and trends GBPCHF could be an interesting pair to watch in 2017. There are numerous global events which can shape the direction on the Franc and clients looking to exchange pounds into Francs or move Francs back to the UK should be considering the path ahead.

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FX Daily, January 05: Dollar Slide but Resilience Demonstrated while Yuan Squeezed Higher

There are two main developments. First, the high degree of uncertainty expressed in the FOMC minutes and the repeated references to the strong dollar spurred a wave of dollar selling. The dollar retreated in Asia, but European participants saw the pullback as a new buying opportunity.

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A Few Takeaways from the Latest IMF Reserve Figures

Overall reserve holdings hardly changed in Q3. China continues to bleed its reserves from unallocated to allocated. Sterling's share of new reserves warns it may be losing some allure.

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