Tag Archive: $EUR
Dollar Index: The Chart Everyone is Talking About
Many are discussing a possible head-and-shoulders pattern in the Dollar Index. We are skeptical as other technical signals do not confirm. We recognize scope for disappointment over the border tax and the next batch of employment data, but European politics is the present driver and may not be alleviated soon.
Read More »
Read More »
FX Weekly Preview: Number One Rule of the Game is Stay in the Game
Light economic calendar in the week ahead, but anticipation of US tax reform may underpin dollar and equities. European politics are in flux (France, Italy, Greece) and this may see spreads widen over Germany. Russia's outlook was upgraded by Moody's before the weekend, and China has announced no coal imports this year from North Korea. Brazil is expected to cut Selic by 75 bps.
Read More »
Read More »
The Consensus Narrative does not Appreciate the Resilience of the System
The system of checks and balances is working. Populism-nationalism is not sweeping across the world. Even in US and UK, populist agenda was appropriated by the main-center right party. The attack on the body politics is activating the immune system in ways that the consensus narrative does not recognize.
Read More »
Read More »
FX Daily, February 17: Greenback Stabilizes Ahead of the Weekend
The US dollar is finishing the week on a steady to firmer note against the major currencies but the Japanese yen. The softer yields and weaker equity markets often are associated with a stronger yen. For the week as a whole, the dollar is mostly lower, though net-net it has held its own against sterling, the euro and Canadian dollar.
Read More »
Read More »
FX Daily, February 16: Corrective Forces Emerge, Tempering the Dollar’s Rally
The Dollar Index had moved higher for ten consecutive sessions before reversing yesterday's gains to close lower. Yesterday and today's losses have seen the Dollar Index retrace 38.2% of the advance since February 2. That retracement objective was near 100.80. The 50% retracement is found near 100.50 and the 61.8% retracement by 100.20.
Read More »
Read More »
FX Daily, February 15: Yellen Helps the Dollar Extend Streak
The Dollar Index's ten-day rally was at risk yesterday, but Yellen's reiteration of the commitment to continue to lift rates gradually helped extend the streak to eleven sessions.This surpassed the streak around the election (November 7-November 18). With today's gains, it may draw closer to what appears to be the long streak, 14 sessions between April 30, 2012 and May 17.
Read More »
Read More »
Greece and the Return of the Repressed
Don't expect a deal between Greece and its official creditors until late spring or early summer. Grexit is still not a particularly likely scenario. It was the European governments not Greece which put other taxpayers' skin in the game.
Read More »
Read More »
FX Daily, February 14: Markets Showing Little Love on Valentines
Corrective pressures are gripping the major capital markets today.The Dollar Index's nine-day advancing streak is being threatened by the position adjustment ahead of Yellen's testimony later today. Despite record high closes in the main US equity markets yesterday, Asia could not follow suit. It tried to initially, and recorded new highs since July 2015, but sellers emerged and the MSCI Asia Pacific Index closed marginally lower on the lows of the...
Read More »
Read More »
FX Weekly Preview: Yellen’s Path Cleared by Trump’s Moderation
Trump has moderated in several areas, he is being checked in others, and less impactful in others. This will underscore the focus on Yellen's testimony this week. At same time, many will be reluctant to short the dollar ahead of the tax reform plans that may be unveiled in Trump's upcoming speech to Congress.
Read More »
Read More »
Cool Video: Bearish Case for Euro and Prospect of Currency Wars
Still in London as this part of the business trip is winding down. I had the privilege of going over to the Bloomberg office today and spoke with Vonnie Quinn and Mark Burton about the euro's outlook and whether the US should have a strong or weak dollar.
Read More »
Read More »
FX Daily, February 09: Dollar Bounce in Asia is Sold in the European Morning
The US dollar is firmer against most of the major currencies in fairly quiet Asian turnover, but is seeing those gains pared in early Europe. The highlights include the RBNZ meeting that left rates on hold, as widely expected. The concern about the strength of the Kiwi saw the market reduce the perceived likelihood of a rate hike. NZD came off.
Read More »
Read More »
Is a Strong or Weak Dollar Good for the US? The $16 trillion Question
Dollar movement helps some economic interest and hurts others. From a strategic point of view, the best thing for the US is the market-generated rate. It was an important achievement that the forex market was de-weaponized. Many observers have been crying wolf about a currency war for many years, which may have de-sensitized investors to the threat of a real one.
Read More »
Read More »
Cool Video: Around the World with Katie Martin of the Financial Times
I am in London as part of a larger business trip. I had the chance today to talk to Katie Martin, who runs Fast FT and is often writing about foreign exchange. They show was live on Facebook. It is about a 22 minute interview and although foreign exchange is the key issue, to get to it we end up talking about many things, including US interest rates, Trump, and even cooking frogs.
Read More »
Read More »
FX Daily, February 08: EUR/CHF down to 1.630, Swiss Boom Starting?
The reader might have seen the latest Swiss Consumer Sentiment and the UBS consumption indicator. They suggest that the Swiss boom phase should finally come.
I anticipated the boom already in my slides for the CFA Society. The Swiss boom was postponed when the SNB decided to remove the euro peg in early 2015.
Read More »
Read More »
FX Weekly Preview: Politics Not Economics is Driving the Markets
The Fed is more confident this year of stable growth and rising inflation. The new US Administration's economic agenda is beginning to take shape, though it is not clear that consumer interests will be pursued. There are several considerations, including politics in Europe, that are driving European rates higher. The RBA and RBNZ meet next week. Neither is expected to change policy.
Read More »
Read More »
FX Daily, February 03: US Jobs Trump Europe’s Service PMIs
Ahead of the weekend, there are two series of economic reports. The first are Europe's service PMI reports and the second is the US employment report. Neither report is likely to alter views significantly, but the latter has greater potential to move the market.
Read More »
Read More »
FX Daily, February 02: Dollar Remains on Back Foot After ADP and FOMC
The US dollar remains on its back foot despite the stronger than expected ADP job estimate and the FOMC that said nothing to dissuade investors that it will be gradually raising rates this year.
Read More »
Read More »
FX Daily, 01 February: Markets Stabilize, Investors Await Signals from US data and FOMC, and POTUS
(commentary will be sporadic for the next couple of weeks during a European business trip) The US dollar is consolidating yesterday's losses that were spurred speculation that the US was abandoning the more than 20-year old strong dollar policy. The meaning of that policy was clear to global investors even if it was often parodied.
Read More »
Read More »
Pressure on Greece Mounts, New Crisis Looms
Greece needs to implement its commitments in the next few weeks or it faces a new crisis. The more the government implements its commitments, the less public support it draws. New elections in Greece cannot be ruled out.
Read More »
Read More »
FX Daily, January 31: Markets Look for Solid Footing
The immigration imbroglio in the United States is being cited in various accounts for the price action, including yesterday's drop in the S&P 500, where the intraday loss was the largest since before the election. The drama is also being blamed for the dollar's losses yesterday, which it is consolidating today.
Read More »
Read More »