dollar outlook

What’s at Stake in 2015-16?

May 12, 2015

This summer will mark the eighth anniversary of the onset of the subprime mortgage loan crisis that spawned a deep world recession and Euroland’s debt crisis.  It’s taken this long to arrive at a point where policymakers are attempting to reverse the massive stimulus of the period.  Most notably, the Federal Reserve will soon begin […] More

A Change is Gonna Come

March 25, 2015

World financial markets have lately been characterized by oscillating share prices, historically low long-term interest rates, a near record pace of dollar appreciation, and unthinkably cheap oil costs.  Forward-looking investors are trying to discern how these distinct themes will interact, which of the properties are most sustainable, and which seem less assured to continue because […] More

Wildly Exciting Times for Currency Market Observers

March 19, 2015

Currency movements matter immensely but rarely get proper respect in U.S. macroeconomic policy.  In the unraveling days of the post-World War 2 fixed exchange rate era, former Secretary of Treasury John Connally arrogantly told his Group of Ten counterparts that the dollar is our currency but your problem.  These days, in contrast, the sharply rising […] More

Where this Year of the Dollar Stacks Up against Others

March 10, 2015

With 81% of this year still waiting to be played out, 2015 is already shaping up to be a special year for the dollar.  Today’s high of $1.0697 per euro was the strongest level against the common European currency since April 9, 2003, and at a peak earlier today of JPY 122.04, the U.S. currency […] More

Dollar Strength Depends on One’s Frame of Reference

February 25, 2015

The dollar has already gained considerable ground against a broad cross-section of other currencies, propelled by relatively strong U.S. growth and the divergent direction of monetary policy guidance from the Fed and the policy outlook for many other central banks that have recently loosened their credit stances and are signaling a bias favoring more support.  […] More

Different Directions So Far in February

February 17, 2015

In this winter of discontent, Greek debt talks are commanding keen attention, but eurozone members, who presumably are susceptible to the forces of contagion have remained surprisingly insulated from market tension.  The ECB’s 20-month-long purchase of EUR 60 billion of assets launches next month, and the Swedish Riksbank is the most recent monetary authority to […] More

Handling the Stronger Dollar

February 9, 2015

Deep economic concerns surround Japan, the euro area, and a number of emerging markets.  Monetary policies have been loosened in many of these countries.  In cases where interest rates have been lifted, the actions have not been a sign of economic normalcy but rather a step taken to stem capital outflows and defend currencies.  The […] More

Officials Likely to Tolerate a Rising Dollar

January 13, 2015

Sure things do not exist in currency forecasting.  That said, the likeliest year-ahead prognosis implies more of the same, that is a rising dollar, falling European currencies, further weakness in a wide range of emerging market monies, and additional yen depreciation.  If these scenarios indeed pan out, it’s only a matter of time before market […] More

Maybe 2014 Was As Good as It Gets

January 6, 2015

Last year was arguably the dollar’s best-performing year in the last four decades.  On a yearend to yearend basis, 2014 was one of only three years for which the dollar posted double-digit advances against both the yen and Europe’s dominant currency (the Dmark until 1998 and the euro thereafter).  The other two examples were 1997 […] More

Who Dealt This Mess Anyway?

November 19, 2014

In this second decade of the 21st century, it is increasingly difficult to pull together a cogent market story.  Part of the problem is the senseless path that world geopolitics seems to be taking.  History documents crises that were more costly than present-day disturbances, but there is a global element to present day dangers that […] More