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Tag Archive: #USD

Capital Flocks to the US

2018-08-19

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2018-08-19

The US policy mix gets a privileged place in our understanding of what is the dollar. Tighter monetary policy and looser fiscal policy could be the closest thing to an elixir for currencies.  It is the policy mix that the US is pursuing.  

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FX Daily, August 17: Dollar Limps into the Weekend

2018-08-17

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2018-08-17

The US dollar is trading heavily against most of the world's currencies today.  The main exceptions come from the emerging markets where the Turkish lira, Russian ruble, and Mexican peso are the chief exceptions, and their losses are modest.  This week's dollar gains are being pared in largely corrective activity and amid a light news stream.  The threat of more sanctions on Turkey if it does not release the American pastor is helping the...

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Great Graphic JPY Struggles at Trendline

2018-08-16

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2018-08-16

This Great Graphic is a weekly bar chart of the dollar-yen exchange rate.  It shows a three-year downtrend line (white line).  The US dollar had popped above it last month, but this proved premature and has not closed about it for a month.  The trendline is found near JPY111.55 now.

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FX Daily, August 15: Lira Rallies on Cut in Swaps, but Fails to Dent Dollar Demand

2018-08-15

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2018-08-15

The Turkish lira is extending yesterday's recovery today on the back of actions by officials that are aimed at limiting foreign access to the lira to short. Without introducing new capital controls, regulators halved the amount of swap transactions banks can do to 25% of shareholder equity. This is meant to make it more difficult to access lira in the offshore swaps market, which is an important channel.

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FX Daily, August 14: Brief Respite but Little Relief

2018-08-14

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2018-08-14

Corrective pressures grip the capital markets today, helped by the easing of the selling pressure on Turkey, but its more a respite than a relief as no new policy initiatives are behind the lira's upticks. The implication of this is that it is unlikely to last. In fact, the dollar's low in early Europe a just above TRY6.41 after trading a little above TRY7.23 yesterday may be about the most that can reasonably be expected.

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Great Graphic: Possible Head and Shoulders Top in Euro

2018-08-14

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2018-08-14

Euro BGN Currency
The euro appears to have carved out head and shoulder top. As this Great Graphic depicts, the euro was sold through the neckline at the end of last week and is 1% below it today. It is not unusual for the neckline to be retested. It is found near $1.15. It also dovetails with our near-term caution given that the euro is likely to close below its Bollinger Band for the second consecutive session (~$1.1440).

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FX Daily, August 13: Turkey Drives Risk-Off, but Pressure Abating

2018-08-13

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2018-08-13

The failure of Turkey to grab the bull by the horns, so to speak, and come to grips with the situation saw the dollar soar above TRY7.23(from TRY6.43 at the end of last week) and to ZAR15.55 (from ZAR14.09). The Mexican peso, the strongest currency this year, and which has been partially protected by prospects of a new NAFTA agreement has suffered as well.

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The Yin and Yang of the US-China Relationship

2018-08-11

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2018-08-11

Chimerica always seemed like an oversimplification of a complex and dialectic relationship between the US and China.  However, it did express an underlying truth, that China's rise over the last 40 years has been predicated on Deng Xiaoping's political and economic reforms and, importantly, the world of free-trade (a reduction in tariff barriers to trade) promoted by the United States.  

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FX Daily, August 10: The Dollar Muscles Higher as Turkey Melts Down

2018-08-10

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2018-08-10

The US dollar has surged. The main impetus comes from the dramatic slide in the Turkish lira. After moving above TRY5.0 yesterday, it reached TRY6.30 today before stabilizing a little below TRY6.0 as the European morning progressed. The trigger seemed to be the lack of credibility of the government's response as investors await officials to elaborate on the outline of the "new economic model" provided yesterday.

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FX Daily, August 09: Sterling Remains Under Pressure, while the Greenback Firms Broadly

2018-08-09

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2018-08-09

The global capital markets are mostly quiet. US sanctions on Turkey and Russia are pressuring their respective currencies, and the New Zealand dollar has slumped nearly 1.5% on the back of a dovish hold by the central bank. The Kiwi is at 2.5-year lows near $0.6650.

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FX Daily, August 08: Sterling Can’t Get Out of Its Own Way, While Dollar and Yen Catch a Bid

2018-08-08

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2018-08-08

Fears that the UK could leave the EU in a little over six months without an agreement continues to drag sterling lower. Recall that over the weekend, the UK's International Trade Minister Fox suggested there was a 60% chance of a no-deal Brexit.

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FX Daily, August 07: Turn Around Tuesday for the Greenback

2018-08-07

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2018-08-07

The US dollar is pulling back today after yesterday's advance. All the major currencies are higher and even the Turkish lira, which plunged nearly 5% yesterday to cap a six-day slide, is trading firmer today ([email protected]). The dollar's losses are modest and appear corrective in nature.

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FX Daily, August 06: Sterling’s Drop Paces Dollar Gains

2018-08-06

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2018-08-06

The US dollar edged higher against most of the major currencies, and emerging market currencies are heavier. Sterling's quarter percent drop makes it the weakest of the majors in slow turnover and it was sufficient to record a new 11-month low.

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FX Weekly Preview: Dog Days of August Begin

2018-08-06

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2018-08-06

With most of the major central bank meetings and important economic data out of the way, the dog days of August are upon us. In terms of drivers, it means that players will have to look elsewhere for inspiration and it means that market liquidy is likely not at its best.

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FX Daily, August 02: BOJ Surprises, BOE on Tap, Trade Worries Weigh on Stocks

2018-08-02

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2018-08-02

The Bank of England meeting concludes a run of major central bank meetings over the past fortnight. The BOE is widely expected to join the Bank of Canada in raising rates. The Federal Reserve and the ECB were content to do and say nothing new.

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FX Daily, August 01: Trade and Japan Drive Markets Ahead of Stand Pat Fed

2018-08-01

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2018-08-01

Investors recognize the risks to growth posed by the tariffs and counter-tariffs being imposed, but the way the US is going about it is also disconcerting. Within a few hours of signals that the US and China were looking to re-engage in high-level talks, which have not taken place for two months according to reports, the US signaled that the 10% tariff on $200 bln of Chinese goods could now face a 25% tariff instead.

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FX Daily, July 31: BOJ Prepares for QE Infinity

2018-07-31

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2018-07-31

The Japanese yen has been sold following the adjustments to policy and outlook by the BOJ that will allow the unconventional policies continue for an "extended period of time." Cross rate pressure and month-end demand have lifted the euro and sterling through yesterday's highs.

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FX Daily, July 30: Equities, Bonds, and the Dollar Start Week Softer

2018-07-30

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2018-07-30

The week's big events lie ahead. It is seen as the last important week before the dog days of summer when many participants will take holidays. The BOJ's two-day meeting concludes tomorrow. Speculation that the BOJ is looking for ways to tweak its program continues to spur a small taper-lite tantrum in Tokyo.

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FX Daily, July 27: Greenback Remains Firm Ahead of Q2 GDP

2018-07-27

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2018-07-27

The US dollar is trading firmly in Europe after consolidating yesterday's gains during the Asian session and ahead of the first look at Q2 GDP. Yesterday's economic reports, including durable goods orders and inventory data, saw the Atlanta Fed's GDPNow tracker lower its forecast to 3.8% from 4.5%.

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FX Daily, July 26: Equities like EU-US Trade Truce more than the Euro

2018-07-26

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2018-07-26

The markets generated a collective sigh when Juncker and Trump announced that there would be no new tariffs while new trade negotiations took place.  This was particularly important because Trump reportedly wanted to press ahead with a 25% tariff on car imports.  It was also announced that the EU would buy more soy and liquid natural gas from the US. 

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