Tag Archive: #USD

FX Daily, January 18: Currencies Consolidate After Chop Fest

2018-01-18

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2018-01-18

The US dollar rallied in the North American afternoon yesterday and the timing coincided with the release of the Fed's Beige Book that saw several districts report wage and price pressures. The US 10-year yield moved toward toward 2.60%, and helped by speculation that as US companies repatriate earnings kept abroad that they may have to liquidate the investments, some of which are thought to be in Treasuries.

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China and US Treasuries

2018-01-18

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2018-01-18

The US Treasury market was consolidating yesterday's 7.5 basis point jump in 10-year yields when Bloomberg's headline hit. The claim was that Chinese officials are "wary of Treasuries". Yields rose quickly to test 2.60% and the dollar moved lower. It is difficult to determine the significance of the claim as the Bloomberg story does not quote anyone.

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FX Daily, January 17: Dollar Stabilizes After Marginal New Lows

2018-01-17

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2018-01-17

After a shallow bounce in Asia and Europe yesterday, the dollar slipped lower in North American yesterday. Asia was happy to extend those dollar losses, and the greenback was pushed to marginal new lower in Asia, but has come back in the European session. The next result is a choppy but flattish consolidation compared with last week's closing prices.

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Great Graphic: Treasury Holdings

2018-01-17

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2018-01-17

Treasury Holdings
The combination of a falling dollar and rising US interest rates has sparked a concern never far from the surface about the foreign demand for US Treasuries. Moreover, as the Fed's balance sheet shrinks, investors will have to step up their purchases.

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FX Daily, January 16: Dollar Given a Reprieve

2018-01-16

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2018-01-16

After extending its recent slide yesterday, which the US markets were on holiday, the dollar is firmer against all the major currencies and most of the emerging market currencies. There does not seem to be macroeconomic developments behind the dollar's stabilization, and the gains are quite minor, suggesting a pause in the downtrend rather than a reversal at this juncture.

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Great Graphic: Euro Monthly

2018-01-13

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2018-01-13

EUR/BGN Currency, 2002 - 2018
The euro peaked in July 2008 near $1.6040. It was a record. The euro has trended choppily lower through the end of 2016 as this Great Graphic, created on Bloomberg, illustrates. We drew in the downtrend line on the month bar chart. The trend line comes in a little below $1.27 now and is falling at about a quarter cent a week, and comes in near $1.26 at the end of February.

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FX Daily, January 12: Euro Jumps Higher

2018-01-12

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2018-01-12

There is one main story today and it is the euro's surge. The euro began the week consolidating it recent gains a heavier bias, but the record of last month's ECB meeting surprised the market with its seeming willingness to change the forward guidance early this year in a more hawkish direction. This spurred a 0.7% gain in the euro back above $1.20. The euro stayed bid in Asia, but took another leg up (~0.75%) in response to reports that a...

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Is the BOJ Tapering?

2018-01-12

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2018-01-12

The G3 central banks are in flux. The Federal Reserve is gradually raising rates and allowing the balance sheet to shrink by not fully reinvesting the maturing proceeds. The ECB will purchase half as many bonds in the first nine months of 2018 as it did in the last nine months of 2017.

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FX Daily, January 11: Capital Markets Calmer, Greenback Consolidates

2018-01-11

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2018-01-11

As market participants were just getting their sea legs back after the start of the year, it was hit by a one-two punch of ideas that BOJ policy was turning less accommodative and that Chinese officials were wary of adding to their Treasury holdings. Then late yesterday, a news wire reported that Canada suspected the US was going to withdraw from NAFTA.

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Cool Video: Bloomberg TV Clip on Central Banks

2018-01-11

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2018-01-11

Bloomberg Video
I joined Alix Steel and David Westin on the Bloomberg set earlier today. Click here for the link. In the roughly 2.5 minute clip, we talk about the US and and the monetary cycle in Europe. In the US, Q4 was another quarter of above trend growth. The Atlanta Fed says the economy is tracking 2.7%, while the NY Fed puts it at 4.0%.

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FX Daily, January 10: Yen Short Squeeze Extended

2018-01-10

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2018-01-10

Sparked by fears that the BOJ took a step toward the monetary exit by reducing the amount of long-term bonds it is buying, there is an apparent scramble to cover previously sold yen positions. The dollar finished last week near JPY113.00. It fell to about JPY112.35 yesterday, near the 50% retracement of the greenback's bounce from the late-November lows near JPY110.85.

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FX Daily, January 09: Dollar Correction Extended

2018-01-09

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2018-01-09

The US dollar's upside correction that began before the weekend has been extended in Asia and Europe today. The main exception is the Japanese yen. The yen's modest gains have been registered despite the firmness in US rates and continued advance in equities; both factors associated with a weaker Japanese currency.

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FX Daily, January 08: Dollar Posts Modest Upticks to Start the New Week

2018-01-08

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2018-01-08

The US dollar is enjoying modest but broad-based gains after trading firmly at the end of last week despite the slightly disappointing jobs report. The dollar's upticks are understood to be corrective in nature. The Canadian dollar appears to be protected by the increased prospects of a rate hike next week after its stellar employment report.

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FX Weekly Preview: Accommodative Officials and Synchronized Upturn Drive Markets

2018-01-08

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2018-01-08

The investment climate is being shaped by two powerful forces. First is the very accommodative policy stance. This includes the United States, where despite delivering the fifth rate hike in the cycle, adjusted by headline CPI, remains negative. The balance sheet has begun being reduced, financial conditions in the US are easier now than a year ago.

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FX Daily, January 05: Dollar Given Reprieve Ahead of Employment Report

2018-01-05

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2018-01-05

As the US dollar finished last year, so too did it begin the New Year, and after extending its losses, the bears have paused. Technical factors had been stretched, but it appears to have been old-fashioned macroeconomic considerations to have helped the dollar to move off the mat. Quickly summarized, these considerations are a larger than expected Australian trade deficit, slippage in Japan's service sector PMI, a larger than expected drop in the...

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Headline US Jobs Disappoint, but Earnings as Expected

2018-01-05

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2018-01-05

The headline US non-farm payrolls disappointed, rising by 148k instead of the consensus of 180k-200k. However, the other details were largely as expected and are unlikely to change views about the trajectory of Fed policy or the general direction of markets. It is a very much steady as she goes story.

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FX Daily, January 04: Greenback Continues to Consolidate Recent Losses

2018-01-04

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2018-01-04

The US dollar is sporting a softer profile across the board, though remaining largely in the ranges seen over the past couple of sessions. At the same time, the news stream suggests that the global synchronized growth cycle strengthened late last year and is bound to carry over into the New Year.

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Cool Video: Is the Third Major Dollar Rally Since Bretton Woods Over?

2018-01-04

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2018-01-04

Video Bloomberg
To many, the question about the fate of the third major dollar rally since the end of Bretton Woods was resolved last year. The dollar fell broadly. It marked the end the greenback's ride higher. However, I remain less convinced that this is really the case. And that is what I discuss in this three-minute clip from Bloomberg's What'd You Miss.

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FX Daily, January 03: Dollar Stabilizes, but Sees Little Recovery

2018-01-03

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2018-01-03

The US dollar is stabilizing but the tone remains fragile. The euro, which has advanced for five consecutive sessions coming into today is slightly lower. The euro had stalled yesterday as it approached last year's high set in September near $1.2090. Yesterday was also the third consecutive close above the upper Bollinger Band, which is found today near $1.2060.

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The Past is Not Passed: 2017 Spills into 2018

2018-01-03

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2018-01-03

The New Year may have begun in fact, but in practice, full participation may return only after the release of US employment data on January 5. The macroeconomic and policy tables have been set, though interpolating from the Overnight Index Swaps market, there is 45% chance the Bank of Canada hikes rates at its policy meeting near the middle of the month.

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