Brexit

Dollar Firmer Especially against Sterling

March 14, 2017

The British parliament granted Prime Minister permission to activate Article 50 of the Lisbon Treaty later this month. Doing so will begin a two-year countdown to negotiate terms and complete the process of leaving the European Union. The dollar advanced 0.8% against the pound in response. The dollar has also risen 0.2% against the euro, […] More

Currency Determination at the Intersection of Economics and Politics

July 14, 2016

Contrary to popular opinion, politics and economics do not operate in separate universes.  Politics is the business governing who gets to make the rules for all other business activity and how the laws will be enforced and interpreted.  Politics determines policy, and abrupt changes in policy and policy communication influence economic performance profoundly.  That’s why […] More

A Meaningful Financial Market Reaction to the British Vote

July 7, 2016

It was said by proponents of Britain leaving the European Union that predictions of dire financial market and real economic consequences were vastly overstated and that any repercussions would be fleeting and overall inconsequential.  Two weeks of post-referendum experience say otherwise. Sovereign debt yields have tumbled, suggesting an elevated risk of recession, the possibility of […] More

Brexit on the Mind and a U.S. Birthday

July 4, 2016

On this 240th anniversary of the U.S. Declaration of Independence, U.S. markets are closed, depleting currency markets of some leadership.  The dollar is little changed against other monies like the euro, yen and sterling. Nigel Farage, head of the UKIP Leave Party, resigned, creating more confusion about Britain’s next government and when the Brexit timetable […] More

Post-Brexit Market Moves Reversed Slightly Ahead of EU Council Meeting

June 28, 2016

The dollar settled back 0.9% against sterling and the kiwi, 0.8% versus the Australian currency, 0.7% relative to the loonie, and 0.6% vis-a-vis the euro and yen.  The yuan and Swiss are mostly unchanged.  Emerging market currencies did better today as well. Ten-year sovereign debt yields rebounded six basis points in the U.K., 3 basis […] More

Big Market Moves on Brexit Day

June 23, 2016

Polls have opened in the U.K. where voters are deciding whether to remain in the EU or leave.  Polls close at 10 PM local time.  Markets are positioned for a “remain” outcome. The dollar rose 1.3% overnight against the yen but is down 1.2% against sterling, 1.0% relative to the loonie, 0.9% versus the New […] More

Sterling Jumps 2%, Naira Plunges 23%, and Rupee Falls, too

June 20, 2016

It looks like the murder of MP Jo Cox, who favored remaining in the EU, may not have been in vain.  A new poll suggests the pendulum of sentiment is swinging toward staying in the European Union, although the margin between the staying versus leaving remains too close to call. Nigeria’s naira hit an air pocket […] More

Stocks Up, Sterling Up and Dollar Mostly Down

June 7, 2016

Sterling recovered around 1%.  Today’s released polls showed voters narrowing favoring staying in the EU, whereas yesterday’s releases gave an edge to the “leave” camp. The dollar otherwise is down 1.0% against the Australian dollar, 0.4% versus the Swiss franc, 0.3% relative to the kiwi and loonie but unchanged against the euro and 0.1% higher […] More

Sterling’s the Biggest Loser Against a Strengthening Dollar

February 22, 2016

Sterling fell 2.0% against the U.S. currency, which also has risen 0.9% against the euro, 0.8% relative to the Swiss franc and 0.5% vis-a-vis the yen.  Emerging market currencies and commodity-sensitive monies have also performed well this Monday.  The U.S. dollar lost 1.1% against the Aussie dollar, 0.4% versus the kiwi, 0.5% against the rand […] More

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