Tag Archive: #USD

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 25: Euro and Kiwi Dragged Lower

2017-09-25

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2017-09-25

The end of the Grand Coalition in Germany and the need for a coalition in New Zealand are weighing on the respective currencies. The euro was marked down in Asia and briefly dipped below $1.19 before recovering to $1.1940 by the middle of the Asian session. It was sold to new lows in the European morning after the weaker than expected IFO survey. Today's survey stands in contrast to the recent PMI and ZEW survey and matches the mood of the market....

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FX Weekly Preview: Old and New Drivers in the Week Ahead

2017-09-25

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2017-09-25

Last week's developments will continue to shape the investment climate in the week ahead, and at the same time, new inflation readings from the US, EMU, and Japan will add incrementally to investors' information set.

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FX Daily, September 22: Markets Limp into the Weekend

2017-09-22

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2017-09-22

The cycle of sanctions, recriminations, and provocative actives continues as the Trump Administration leads a confrontation with North Korea. The US announced yesterday new round of sanctions on North Korea. Reuters reported that the PBOC has instructed its banks not to take on new North Korean clients and to begin unwinding existing relationships.

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FX Daily, September 21: Market Digests Fed, Greenback Consolidates, Antipodeans Tumble

2017-09-21

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2017-09-21

The market has mostly interpreted the Fed's action in line with our thinking. Despite the lowering of the long-run Fed funds rate, the shifting one of the three hikes from 2019 into 2020, and recognizing that the weaker price impulses are somewhat mysterious, the Fed clearly signaled its bias toward hiking rates one more time this year and three next year.

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FX Daily, September 20: Shrinkage and Beyond

2017-09-20

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2017-09-20

After much anticipation, the FOMC decision day is here. Much of the focus is on the likely decision that the Fed will allow its balance sheet to shrink gradually. No other country who employed quantitative easing has is in a position to begin unwinding the emergency expansion of its balance sheet. The Fed's experience in QE, communication, and now unwinding, will be part of the information set other central banks can draw upon.

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FX Daily, September 18: More Thoughts from Berlin

2017-09-18

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2017-09-18

The unexpected weakness in US retail sales and industrial production reported before the weekend did not prevent US yields and stocks from rising.  Asia followed suit, and with Japanese markets closed, the MSCI Asia Pacific Index rallied a little more than 1%, the largest gain in two months.  Of note, foreigners returned to the Korean stock market, buying about $260 mln today, which cuts the month's liquidation in half.  The Kospi rallied 1.3%...

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FX Weekly Preview: FOMC Highlights Big Week

2017-09-18

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2017-09-18

The days ahead are historic. By all reckoning, Merkel will be German Chancellor for a fourth consecutive term. Many observers expect the election to usher in a new era of German-French coordination to continue the European project post-Brexit and in the aftermath of the Great Financial Crisis.

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FX Daily, September 15: Short Note Ahead of the Weekend

2017-09-15

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2017-09-15

Sporadic updates continue as the first of two-week business trip winds down. North Korea missile launch failed to have much impact in the capital markets. The missile apparently flew the furthest yet, demonstrating its ability to hit Guam. However, there was not an immediate response from the US. South Korea said it had simultaneously conducted its own drill which included firing a missile into the Sea of Japan (East Sea).

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FX Daily, September 14: New Trump Tactics Help Greenback and Rates

2017-09-14

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2017-09-14

In the face of much cynicism and pessimism about the outlook for the Trump Administration's agenda, we have repeatedly pointed out the resilience of the system of checks and balances. Many of the more extreme positions have been tempered, either on their own accord, such as naming China a currency manipulator or pulling out of NAFTA or KORUS, or the judiciary branch, such as on immigration curbs, or the legislative branch itself, as in limiting the...

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FX Daily, September 13: Sterling Shines While Euro Stalls in Front of $1.20

2017-09-13

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2017-09-13

The next leg of the business trip takes me to Frankfurt. Sporadic updates will continue. We have been identifying the $1.3430 area is a reasonable technical target for sterling. It represents the 50% retracement of sterling's losses since the day of the referendum June 2016 when it briefly traded $1.50. Also helping sterling is the unwinding of short cross positions against the euro.

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FX Daily, September 12: Dollar Sports Heavier Tone as Yesterday’s Bounce Runs out of Steam

2017-09-12

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2017-09-12

The sporadic updates continue while I am on a two-week business trip. Now in Barcelona, participating in TradeTech FX Europe. The euro advanced yesterday from NOK9.30 to NOK9.40. It is consolidating in a tight range today. The election results may have been a bit closer than expected, but the weight on the krone yesterday seemed to stem more from the unexpectedly soft inflation report.

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FX Weekly Preview: Forces of Movement in FX: The Week Ahead

2017-09-11

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2017-09-11

The dollar has been declining since the start of the year, but the causes have changed. The drag from US politics may be exaggerated, while European and Japanese politics are worrisome. The economic data may continue to be a drag on US yields, especially if core CPI slips again.

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FX Daily, September 08: US Dollar Tracks Yields Lower

2017-09-08

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2017-09-08

The US dollar has been unable to find any traction as US yields continue to move lower. The US 10-year year is slipping below 2.03% in European turnover, the lowest level in ten months. The risk, as we have noted, is that without prospects of stronger growth and inflation impulses, the yield returns to where was before the US election (~1.85%). The two-year note yield, anchored more by Fed policy than the long-end,  is also soft. It yielded 1.25%...

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FX Daily, September 07: ECB Focus for Sure, but not Only Game in Town

2017-09-07

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2017-09-07

The US dollar is trading broadly lower. The ECB meeting looms large. Many, like ourselves, expected that when Draghi said in July that the asset purchases would be revisited in the fall, it to meant after the summer recess, not a legalistic definition of when fall begins. Still, there have been some reports, citing unnamed sources close to the ECB, that have played down such expectations, and warn a decision on next year’s intentions may not be...

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FX Daily, September 5: Greenback Mixed, North Korea and PMIs in Focus

2017-09-05

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2017-09-05

Reports suggesting that North Korea is moving an ICBM missile toward launch pad in the western part of the country at night to minimize detection, while South Korea is escalating its military preparedness and the US seeks new sanctions, keep investors on edge. Risk assets are mixed. Gold is slightly lower. While the yen is stronger, the Swiss franc is heavier. Asia equities slipped, and European shares are recouping much of yesterday's 0.5% loss.

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FX Weekly Preview: Three Central Banks Dominate the Week Ahead

2017-09-04

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2017-09-04

Following strong Q2 GDP figures, risk is that Bank of Canada's rate hike anticipated for October is brought forward. ECB's guidance to that it will have to extend its purchases into next year will continue to evolve. Among Fed officials speaking ahead of the blackout period, Brainard and Dudley's comments are the most important.

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Cool Video: CNBC Clip Tactical and Strategic Dollar Outlook

2017-09-03

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2017-09-03

I appeared on CNBC earlier today to talk about the dollar. I was given the time to briefly sketch out my view of the dollar. Near-term, I am concerned about the political and economic events in September, but I am looking for a better Q4 for the greenback.

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