Tag Archive: #USD

FX Daily, August 16: Dollar Slumps, but Driver may Not be so Obvious

The US dollar is being sold across the board today. The US Dollar Index is off 0.65% late in the European morning, which, if sustained, would make it the largest drop in two weeks. The proximate cause being cited by participants and the media is weak US data that is prompting a Fed re-think.

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FX Daily, August 15: Dollar Eases to Start the New Week

The US dollar closed the pre-weekend session well off its lows that were seen in response to the disappointing retail sales report. It has been unable to sustain the upside momentum, and as North American dealers prepare to return to their posts, it is trading lower against most of the major currencies. The notable exceptions are the Scandi-bloc, which are consolidating last week's gains, and sterling, which remains pinned near $1.29.

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Bretton Woods: RIP

Some romanticists want to have another Bretton Woods fixed exchange rate regime. Bretton Woods had difficulty from nearly the day it went operational. It is misguided to think a new rigid regime is needed or is appropriate.

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FX Weekly Preview: Thoughts on the Significance of Ten Developments

The GDP deflator may be just as important as overall growth for BOJ considerations and the possibility of fresh action next month. Falling UK rates and a weaker pound are desirable from a policy point of view. Dudley's press conference may be more important than FOMC minutes. Two German state elections that will be held next month comes as Merkel's popularity has waned.

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FX Daily, August 12: Summer Markets Grind into the Weekend

There is a general consolidative tone in the capital markets as the week draws to a close. The US retail sales report may offer a brief distraction, but it is unlikely to significantly shift expectations about the trajectory of Fed policy. Indeed, it might not really change investors' information set.

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FX Daily, August 11: Sterling Struggles to Find a Bid, While RBNZ Can’t Knock Kiwi Down

Once again, EUR/CHF reverses in the middle of the week. A part from technical reasons, the weak French CPI (+0.4% YoY) and Italian CPI (-0.2% YoY) exercised downwards pressure on the euro. The US dollar has found steadier footing today after trading heavily yesterday. There are two main themes. The first is sterling’s heavy tone.

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Two Things I Learned Looking for Something Else

LIBOR continues to rise. The relative calm of the markets will likely end next month. The last four months of the year are jammed with key events that have potential to disrupt the markets.

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Cool Video: CNBC Asia–Mostly about the Redback and Greenback

I was invited to appear on CNBC Asia Rundown show with Pauline Chiou. We discuss the Chinese yuan on the anniversary of last summer's unexpected devaluation. I suggest that most of the things that get observers excited, like the internationalization of the yuan, or the Hong Kong-Shanghai link or, perhaps by the end of the year,a Hong Kong-Shenzhen link are really Chinese machinations that are the result of its contradictions.

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FX Daily, August 10: FX Consolidation Resolved in Favor of Weaker US Dollar

European bourses are mixed, and this is leaving the Dow Jones Stoxx 600 practically unchanged in late-European morning turnover. Financials are the strongest sector (+0.4%), and within it, the insurance sector is leading with a 0.8% advance and banks are up 0.4%. The FTSE's Italian bank index is up 1.4% to extend its recovery into a fifth session.

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FX Daily, August 04: The BOE Owns Today, but Tomorrow is a Different Story

The Swiss Franc appreciated today against the euro. Given that the Bank of England started monetary easing, this slight appreciation is unexpectedly weak - reason was probably intervention. The SNB intervention level should be around 1 billion francs. Numbers revealed in next week's sight deposits.

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FX Daily, August 03: Consolidation Featured

The US dollar is consolidating yesterday's losses. The greenback's upticks have thus far been shallow and unimpressive, except perhaps against the New Zealand dollar, which is off 0.8% ahead of next week's RBNZ meeting. Softer than expected labor cost increase reinforces the conviction that a 25 bp rate cut will be delivered next week.

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Gorilla or Elephant, Chinese Surplus Capacity is the Challenge

China's excess capacity is one of the most formidable challenges the China and the world face. Unexpectedly, China's steel industry reported a profit in H1 16. M&A for industry rationalization and foreign markets seem to be the main ways China is trying to address the excess capacity.

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FX Daily, August 02: Greenback Slides Despite RBA Rate Cut and 7-year Low in UK Construction PMI

The US dollar is offered against the major currencies, but appreciating against many emerging market currencies, include the South African rand and Turkish lira. Oil prices are trying to stabilize with Brent near $42 and WTI near $40, but the recent losses continue to weigh on the Malaysian ringgit and the Mexican peso.

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FX Daily, August 01: Dog Days of August Begin

The US dollar is trading with a small upside bias in narrow trading ranges. The main news has consisted of PMI reports, while investors continue to digest last week's developments. In particular the BOJ's underwhelming response to poor economic data and a missed opportunity to reinforce the fiscal stimulus, and the dismal US GDP.

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Great Graphic: Real Broad Trade-Weighted Dollar

The real broad trade-weighted dollar index rose in July for the third month. It peaked in January above trendline drawn through the Reagan and Clinton dollar rallies. Expect the trendline to be violated again before the end of the year.

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FX Weekly Preview: After this Week, Does August Matter?

RBA meeting is a close call. BOE meeting consensus on rate cut, maybe new QE and lending-for-funding. More details of Japan's fiscal policy. U.S. jobs data. After this week, and outside of RBNZ rate cut, August may be uneventful.

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FX Daily, July 29: Kuroda Hesitates, Yen Advances, Focus Turns to Europe and North America

Main events: Far Lower GDP Growth due to higher inflation and bigger trade deficit. Yen and Swissie advance and weaker dollar. Swiss economy remains on track based on the KOF economic barometer.

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FX Daily, July 28: Dollar Pulls Back Further Post-FOMC

After reversing lower yesterday after the FOMC statement, the US dollar has continued to move lower against the major currencies, save sterling. While the market is not fully confident of a rate cut by the Reserve Bank of Australia, indicative pricing in the derivative markets suggest a UK rate cut has been fully discounted (and a new asset purchase plan may also be announced).

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Fasten Your Seat Belts: Tomorrow Promises to be Tumultuous

Japan reports on labor, consumption, inflation and industrial output before the BOJ meeting. ECB reports inflation and Q2 GDP and the results of the stress test on banks. US reports first look at Q2 GDP.

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FX Daily, July 27: Yen Falls on Fiscal Stimulus, while Sterling and Aussie Can’t Sustain Upticks

Swiss Franc: The Euro kept on climbing, after yesterday's rapid rise. The Swiss consumption indicator by UBS shows improvements. The indicator is still distant from the highs in 2012. At the time stronger growth in Emerging Markets and the weaker franc helped the Swiss economy.

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