Tag Archive: #USD
FX Daily, September 20: The Swiss Franc Continues To Rise.
The trade balance express if a currency is overvalued or not. The Swiss trade surplus is constant or rather rising, hence the Swiss Franc is correctly valued or rather undervalued. And the franc continues to appreciate.
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FX Daily, September 19: Dollar Begins Important Week on Softer Note
The US dollar, which finished last week on a firm note, is under pressure to start the new week that features Bank of Japan and Federal Reserve meetings. The slighter stronger August CPI reading helped lift the greenback ahead of the weekend, but investors continue to see a low probability of a Fed hike this week.
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Great Graphic: Median U.S. Income per Presidents
Median household income was higher in 2015 than in 2008, but still below 1999 peak in real terms. The bottom fifth of households by income have just recouped what was lost. Income growth did best under (Bill) Clinton and Reagan, including for top 5%. Origin of strong dollar policy means it will not be used as a trade weapon and it hasn't since Bentsen.
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FX Weekly Preview: Punctuated Equilibrium and the Forces of Movement
Shifting intermarket relationships pose challenge for investors. The market is convinced the Fed will not raise rates. Greater uncertainty surrounds the BOJ; there seems less willingness to shock and awe.
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Yellow Lights are Flashing
Bonds are not rallying despite poor US data. Greater chance that Trump gets elected than the Fed hikes next week. Berlin may be more important than Bratislava.
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FX Daily, September 15: Early Update: Full Calendar but Little News
Looking at the diary, today is the most important day of the week. The Bank of England and the Swiss National Bank meet. The UK reports retail sales. EMU reports CPI figures. The US reports retail sales, industrial output, and two September Fed surveys. Yet the economic updates are unlikely change sentiment ahead of next week FOMC and BOJ meetings.
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Thoughts on the Price Action
Global interest rates are rising. Something important is happening. It appears to be dollar positive.
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FX Daily, September 13: Much Noise, Weak Signal
The last ECB meeting and Dragh's hawkish comments is for us the main reason of the euro strength, this despite stronger Swiss GDP growth.
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FX Daily, September 12: Markets Off to a Wobbly Start
The EUR/CHF retreated today together with falling stock prices. When investors sell their stocks and move into cash, then the Swiss Franc very often appreciates. This is the safe haven effect: cash in Swiss Franc is perceived as more secure.
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FX Weekly Preview: Capital Markets in the Week Ahead
Global bonds and global stocks ended last week on a weak note and this will likely carry into this week's activity. The Bank of England meets, but the data may be more important. Oil and commodity prices more generally look vulnerable, and this coupled with higher yields sapped the Australian ad Canadian dollar in the second half of last week.
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FX Daily, September 9: Ahead of the Weekend
The US dollar is lower against all the major currencies this week as North American participants close it out. On the day, the dollar is consolidating swings yesterday and is narrowly mixed.Bond yields are higher and equities are mostly lower. The euro has finished lower the last three Fridays. The streak may end today. The euro has found support nearly $1.1260, and the intraday technicals favor a move higher in the US morning.
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FX Daily September 8: Draghi Says Little, Door Still Open for More
In the last two days, the euro moved upwards against CHF. Given that Swiss GDP was stronger than the one in the euro zone, this is surprising. But we must recognize that Draghi could be the reason. Inflation forecasts of 1.2% in 2017 and 1.8% in the euro zone would mean the ECB hikes rates maybe in 2018 or 2019. I personally do not believe it, given that wage inflation in Italy or Spain is clearly under 1%. This is lower than Swiss wage inflation...
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FX Daily, September 07: Dollar Stabilizes, but Hardly Recovers
Disappointing industrial output figures from Germany and UK are helping stabilize the US dollar after yesterday's shellacking. Investors have been fickle about the prospects for a rate hike this month, and the unexpected dramatic slide in the service spurred a downgrading of such expectations, and a flight out of the dollar. It was not simply a quest for yields, though that was part of it. Surely the yen and euro's strength is not a function of...
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FX Daily, September 6: Dollar Heavy in Quiet Markets
The US dollar is trading heavily against most of the major and emerging market currencies. However, the losses are modest, and the greenback remains within recent ranges. The Antipodean and Scandi bloc currencies are performing best.
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Services ISM Sends Greenback Reeling
ISM showed unexpected weakness in Aug non-mfg PMI. Markit measure slipped but not as much as ISM. Odds of a Sept Fed hike slip to about 15%. Watch trendline in Dollar Index near 94.45.
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FX Daily, September 5: While Americans were Celebrating Labor Day
There were several developments that took place while US markets were closed for its Labor Day holiday. Most of the economic news was favorable. This included a strong snap back in the UK service PMI, more evidence that the moral suasion campaign to lift wages in Japan is yielding some success and a rise in the Caixin's China's service PMI.
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FX Weekly Preview: Parsing Divergence: Focus Shifts from Fed to ECB
Net-net, the September Fed funds futures contract was little changed on the week. Four high-income central banks meet in the week ahead; the ECB is the only one in play. China accounted for a full three quarters of the US trade deficit in July.
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FX Daily, September 2: US Jobs Data–Higher Anxiety, Thank You Mr. Fischer
The US dollar is little changed ahead of the job report. Our near-term bias is for a lower dollar. Sterling is flat and is holding on to about a 1% gain this week. The Japanese yen is about a 0.3% lower and is off 1.7% this week. The euro was coming into today for the week.
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FX Daily, September 01: A Couple of Surprises to Start the New Month
The new month has begun with a couple of surprises. The biggest surprise has been the record jump in the UK manufacturing PMI to 53.3 from 48.3. A much smaller rebound was expected in August after the Brexit shock drop in July.
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FX Daily, August 31: Dollar Bides Times, Month-End at Hand, Jobs Data Ahead
The US dollar is a little softer against most of the major and emerging market currencies. The exception is the Japanese yen, where the greenback has moved above JPY103 for the first time in a month. The tone is consolidative as the market awaits assurances that the jobs growth this month has been sufficiently strong as to keep the prospects of a September meeting still alive.
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