Tag Archive: #USD

FX Daily, February 09: Dollar Bounce in Asia is Sold in the European Morning

2017-02-09

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2017-02-09

Winter
The US dollar is firmer against most of the major currencies in fairly quiet Asian turnover, but is seeing those gains pared in early Europe. The highlights include the RBNZ meeting that left rates on hold, as widely expected. The concern about the strength of the Kiwi saw the market reduce the perceived likelihood of a rate hike. NZD came off.

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Is a Strong or Weak Dollar Good for the US? The $16 trillion Question

2017-02-09

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2017-02-09

Еagleflag
Dollar movement helps some economic interest and hurts others. From a strategic point of view, the best thing for the US is the market-generated rate. It was an important achievement that the forex market was de-weaponized. Many observers have been crying wolf about a currency war for many years, which may have de-sensitized investors to the threat of a real one.

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Cool Video: Around the World with Katie Martin of the Financial Times

2017-02-09

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2017-02-09

Fintool - Marc Chandler
I am in London as part of a larger business trip. I had the chance today to talk to Katie Martin, who runs Fast FT and is often writing about foreign exchange. They show was live on Facebook. It is about a 22 minute interview and although foreign exchange is the key issue, to get to it we end up talking about many things, including US interest rates, Trump, and even cooking frogs.

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FX Daily, February 08: EUR/CHF down to 1.630, Swiss Boom Starting?

2017-02-08

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2017-02-08

EUR/CHF - Euro Swiss Franc, February 08
The reader might have seen the latest Swiss Consumer Sentiment and the UBS consumption indicator. They suggest that the Swiss boom phase should finally come. I anticipated the boom already in my slides for the CFA Society. The Swiss boom was postponed when the SNB decided to remove the euro peg in early 2015.

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The Dollar: Real or Nominal Rates?

2017-02-06

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2017-02-06

US Dollar Index Currency 2011-2017
Real interest rates are nominal rates adjusted for inflation expectations.Inflation expectations are tricky to measure. The Federal Reserve identifies two broad metrics. There are surveys, like the University of Michigan's consumer confidence survey, and the Fed conducts a regular survey of professional forecasters. There are also market-based measures, like the breakevens, which compare the conventional yield to the inflation-linked, or protected...

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FX Weekly Preview: Politics Not Economics is Driving the Markets

2017-02-06

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2017-02-06

The Fed is more confident this year of stable growth and rising inflation. The new US Administration's economic agenda is beginning to take shape, though it is not clear that consumer interests will be pursued. There are several considerations, including politics in Europe, that are driving European rates higher. The RBA and RBNZ meet next week. Neither is expected to change policy.

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FX Daily, February 03: US Jobs Trump Europe’s Service PMIs

2017-02-03

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2017-02-03

FX Performance, February 03 2017 Movers and Shakers
Ahead of the weekend, there are two series of economic reports. The first are Europe's service PMI reports and the second is the US employment report. Neither report is likely to alter views significantly, but the latter has greater potential to move the market.

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Thoughts about the Fed’s Balance Sheet

2017-02-02

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2017-02-02

hotair balloon
Several regional Fed presidents want to begin talking about shrinking Fed's balance sheet. Leadership does not appear to have great urgency, so don't expect anything in this week's statement. First step more hikes, then refrain from reinvesting payments and maturities, but slowly.

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FX Daily, 01 February: Markets Stabilize, Investors Await Signals from US data and FOMC, and POTUS

2017-02-01

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2017-02-01

(commentary will be sporadic for the next couple of weeks during a European business trip) The US dollar is consolidating yesterday's losses that were spurred speculation that the US was abandoning the more than 20-year old strong dollar policy. The meaning of that policy was clear to global investors even if it was often parodied.

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FX Daily, January 31: Markets Look for Solid Footing

2017-01-31

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2017-01-31

FX Performance, January 31 2017 Movers and Shakers
The immigration imbroglio in the United States is being cited in various accounts for the price action, including yesterday's drop in the S&P 500, where the intraday loss was the largest since before the election. The drama is also being blamed for the dollar's losses yesterday, which it is consolidating today.

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Trump and the Dollar

2017-01-31

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2017-01-31

Dollar Shoes
US official comments on the FX market appear to have increased in frequency. They are mostly warnings about a strong dollar, but not all comments are dollar-negative. Policy is the ultimate driver but comments pose headline risk.

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FX Daily, January 30: EUR/CHF falls further to 1.650

2017-01-30

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2017-01-30

FX Performance, January 30 2017 Movers and Shakers
The EUR/CHF collapsed once again to 1.0650. This rate broke the 1.0680 - 1.0700 that constituted the previous intervention area. Reasons can be found in the weak U.S. GDP weak, in Trump's foreign trade policy and in the strong Swiss trade balance.

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FX Weekly Preview: Yellen nor Kuroda nor Carney will Take the Spotlight from Trump

2017-01-30

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2017-01-30

eagle
Fed, BOJ, and BOE meet next week, each may adjust economic assessments in more favorable direction. Key challenge for many investors is the new US Administration. US employment, EMU inflation, Q4 GDP, and China's PMI are among the data highlights.

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The Grand Strategy: Fixed Spheres of Influence or Variable Shares?

2017-01-28

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2017-01-28

mate
The US has a direct investment strategy for historical reasons. It competes against export-oriented strategies. The FDI strategy does make low-skilled domestic labor compete with low-skilled foreign worker, but skilled workers abroad complement the skilled domestic worker.

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FX Daily, January 27: Week Ending on Mixed Note as Year of Rooster Begins

2017-01-27

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2017-01-27

FX Performance, January 27 2017 Movers and Shakers
The Lunar New Year celebration thinned participation in Asia, where several centers are closed. Although the MSCI Asia Pacific Index slipped slightly, it rose 1.5% on the week, the fourth weekly gain in the past five weeks. The Nikkei advanced 0.35%, the third rise in a row. The 1.75% gain for the week snaps a two-week decline.

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Are Interest Rates No Longer Driving the Dollar?

2017-01-27

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2017-01-27

US 10-year yield and US Dollar
Many are concerned that the dollar and interest rates have become decoupled. We are not convinced. Correlations, not to be eyeballed, are still robust.

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FX Daily, January 26: EUR/CHF collapses to 1.670

2017-01-26

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2017-01-26

FX Performance, January 26 2017 Movers & Shakers
The US dollar is mostly firmer against the major currencies but is confined to narrow ranges, and well-worn ranges at that, but the focus has shifted to the strong advance in equities. Yesterday, the Dow Jones Industrials finally rose through the psychologically-important 20k level, and the S&P 500 gapped higher to new record levels.

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FX Daily, January 25: Dollar is on the Defensive Despite Firmer Rates

2017-01-25

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2017-01-25

FX Performance, January 25 2017 Movers and Shakers
The US dollar is softer against nearly all the major currencies. Participants appear to be growing increasingly frustrated with emerging priorities of the new US Administration. They want to hear more details and discussion of the tax reform, deregulation, and infrastructure plans.

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Great Graphic: How a Strong Dollar Weighs on Net Exports

2017-01-25

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2017-01-25

Contributions of Exports and Imports to GDP Growth
Investors appreciate that a strong dollar can impact US growth through the net export component of GDP. The dollar's appreciation can push up the price of exports and lower the cost of imports. The St. Louis Fed took a look at how the strong dollar from 2014 to the beginning of 2016 impacted the net export function of GDP.

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FX Daily, January 23: Dollar’s Pre-Weekend Retreat Extended in Asia Before Stabilizing in Europe

2017-01-23

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2017-01-23

FX Performance, January 23 2017 Movers and Shakers
The US dollar had a poor close in the North American session before the weekend as investors appear increasing anxious about the new US Administration's economic policies and priorities.With no fresh details emerging over the weekend, some stale dollar longs exited. The dollar stabilized in the European morning, but broader risk appetites were not rekindled, and the Dow Jones Stoxx 600, led by financials, was sold to its lowest level this month.

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