Tag Archive: $EUR

FX Weekly Preview: The Markets and the Long Shadow of Politics

2017-10-16

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2017-10-16

Rise in paper asset prices, including so-called cyber currencies, reflects the abundance of capital. Have we forgotten what Minski taught again? Political considerations may dominate ahead of the ECB meeting later this month.

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Political Focus Shifting in Europe

2017-10-15

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2017-10-15

There was a huge sigh of relief among investors when it became clear that the populist-nationalist wave that ostensibly led to Brexit and Trump's election was not going to sweep through Europe. The euro gapped higher on April 24, and it has not looked back. We have suggested that with the outcome of the German election, European politics shift from tailwind to headwind.

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Brief Thoughts on the Euro

2017-10-14

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2017-10-14

Euro peaked a month ago. The reversal before the weekend marks the end of the leg lower. ECB meeting is next big focus. ECB may focus on gross rather than net purchases.

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FX Daily, October 13: Sterling Extends Yesterday’s Recovery; US Data Awaited

2017-10-13

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2017-10-13

The EU's leading negotiator whipsawed sterling yesterday. The net effect was to ease fears that the UK would leave the EU without the agreement Initial concerns that the negotiations had stalled sent sterling to nearly $1.3120. The willingness to discuss a two-year transition period spurred sterling's recovery. After trading on both sides of Wednesdays, it closed on its highs was a bullish technical signal and there has been follow-through buying...

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FX Daily, October 12: Discipline Argues Against Consensus Narrative

2017-10-12

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2017-10-12

Following the release of the FOMC minutes from last month's meeting, the consensus narrative that has emerged says that it was dovish because there is a growing worry the reason inflation fell is not simply due to transitory factors. This explains, according to the narrative the dollar's losses and the stock market rally.

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FX Daily, October 11: Markets Looking for a New Focus

2017-10-11

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2017-10-11

The US dollar is consolidating after retreating since reversing lower following the US jobs data at the end of last week. While the greenback has largely been confined to yesterday's ranges against the major currencies, the euro has made a marginal new high, briefly trading through the $1.1830 area noted yesterday.

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FX Weekly Preview: Forces of Movement

2017-10-09

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2017-10-09

Over the past few weeks, the markets have come to accept the likelihood of a December Fed hike. US interest rates have adjusted. The pricing of December Fed funds futures contract is consistent with around an 80% chance of a hike. The two-year yield is trading at the upper end of what is expected to be the Fed funds target range at the end of the year, after slipping below the current range a month ago. The Dollar Index formed a bottoming pattern.

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Cool Video: Double Feature Courtesy of Bloomberg

2017-10-08

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2017-10-08

Tom Keene and Francine Lacqua gave me a most appreciated opportunity to present my dollar views on Bloomberg TV earlier today. They also let me opine about current events, like Catalonia's push for independence and May's troubled speech at the Tory Party Conference. Bloomberg made two clips of the discussion available. The first is about the dollar's outlook broadly. I suggest a combination of technical and fundamental factors point to a strong Q4...

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FX Daily, October 6: Look Through the US Jobs Report

2017-10-06

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2017-10-06

Traders are putting the final touches on another strong weekly performance for the US dollar. Strong economic data, including the PMIs, auto sales, and factory orders have surprised to the market. The ADP report warns that the storms that flattered some high frequency data will likely skew today's employment report (both headline and details) to the downside. Of course, investors will quickly look for the number of people who could get to work due...

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FX Daily, October 05: Sterling and Aussie Weakness Featured in the Otherwise Becalmed FX Market

2017-10-05

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2017-10-05

The US dollar is mostly little changed as the broad consolidation that has emerged this week continues. The two powerful forces that have emerged--expectation of a Fed hike at the end of the year and European political challenges--appear to have reached a tentative equilibrium.

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FX Daily, October 04: Consolidative Tone in FX Continues

2017-10-04

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2017-10-04

The US dollar has a softer tone today, and it was that way even for the European PMI. The greenback eased further after the upside momentum faded yesterday. The heavier tone in Asia seemed spurred by a hedge fund manager's call that Minneapolis Fed President, and among the most dovish members of the FOMC, Kashkari would be the next Fed chair.

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FX Daily, October 03: Dollar Retains Firm Tone, Spanish Markets Stabilize

2017-10-03

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2017-10-03

Firm US interest rates and a strong manufacturing ISM yesterday help support the greenback, while disappointing construction PMI in the UK weighs on sterling. The euro briefly slipped below $1.17 in Asia for the first time in six weeks. It has recovered toward the highs seen in North America yesterday (~$1.1760). There are several euro option strikes that may be in play today. In the euro, between $1.1750 and $1.1775, there are nearly 2.9 bln euros...

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FX Daily, October 02: Dollar Upbeat to Start Fourth Quarter

2017-10-02

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2017-10-02

The US dollar is broadly higher as the quarter-end positioning losses seen at the end of last week area reversed. Developments in the US are seen as dollar positive, while the Catalonia-Madrid conflict, and slightly softer EMU manufacturing PMI weighs on the euro. The UK also reported a disappointing manufacturing PMI, and more differences with the Tory government are taking a toll on sterling. Japan's Tankan Survey was stronger than expected, but...

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FX Weekly Preview: Changing Dynamics

2017-10-02

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2017-10-02

We agree with the consensus that the markets are in a transition phase. The consensus sees this transition phase as a new economic convergence. European and Japanese economic growth continues above trend. Large emerging markets, including BRICs, are also expanding. Central banks are gradually moving away from the extreme accommodation.

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Great Graphic: Potential Head and Shoulders Bottom in the Dollar Index

2017-10-01

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2017-10-01

This Great Graphic was composed on Bloomberg. t shows the recent price action of the Dollar Index. There seems to be a head and shoulders bottoming pattern that has been traced out over the last few weeks. The right shoulder was carved last week, and today, the Dollar Index is pushing through the neckline, which is found by connecting the bounces after the shoulders were formed.

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FX Daily, September 29: Dollar’s Gains Pared, but Set to Snap Six Month Losing Streak Against the Euro

2017-09-29

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2017-09-29

Supported by a sharp rise in interest rates and ideas of tax reform, the US dollar is closing one of its best months of the year. The Dollar Index is snapping a six-month decline, and the euro's monthly advance since February is ending. This month, the US 10-year yield has risen 18 bp, and the two-year yield has risen 13 bp. It is the biggest increase since last November.

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FX Daily, September 28: Greenback Consolidates while Yields Continue to March Higher

2017-09-28

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2017-09-28

The US dollar is consolidating inside yesterday's ranges against the euro and yen while extending its gains against sterling and the dollar-bloc currencies. The sell-off in the US debt market continues to drag global yields higher. The 10-year Treasury yield reached 2.01% on September 8 and now, nearly three weeks later, is near 2.35%. It had finished last week at 2.25%.

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FX Daily, September 27: Dollar Builds on Gains

2017-09-27

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2017-09-27

The Federal Reserve may not be on a coordinated campaign to convince the markets of a pending rate hike as it did so effectively in late February and early March. But investors are getting the message. The Bloomberg calculation of the odds of a rate hike before the end of the year has risen to 70% from 53% before last week's FOMC meeting and 33.5% at the end of last month. The CME puts the odds at 81% up from 37% a month ago.

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FX Daily, September 26: Weekend Election and North Korea Rhetoric Helps Greenback Remain Firm

2017-09-26

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2017-09-26

The US dollar is firmer against most major currencies today. The implications the Jamaica coalition in Germany is understood to be less likely to support a new vision for Europe in the aftermath of Brexit and the Great Financial Crisis. The euro's low for the year was set at the very start near $1.0340. The first quarter or so was spent consolidating the gains in H2 16. It was trading below $1.06 in early April.

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