Dollar

Dollar Up ahead of Trump’s First Press Conference

January 11, 2017

The dollar appreciated overnight by 0.5% against the euro, 0.4% versus the yen, Swissie and sterling, 0.2% relative to the Mexican peso, and 0.1% relative to the yuan. It dipped 0.1% vis-a-vis the New Zealand and Australian currencies but extended its rise against the Turkish lira by about 2%. The juxtaposition of Obama’s Farewell Address […] 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

Continuing Brexit Concerns and FOMC Day

June 15, 2016

A fifth published poll of British voters gives an edge to those favoring an exit from the European Union. Today’s main event will be the FOMC statement due at 18:00 GMT and subsequent press conference. China made news in three ways earlier today.  First, MSCI announced it will not include equities in its indices. The second […] More

Currency Management Norms Under Threat

May 23, 2016

A statement released April 15 by G20 finance ministers and central bank governors reaffirmed a position against currency manipulation that represents a coordinated stance that’s been in place already for a long time: Excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.  We will consult closely on […] More

The Mother of All Resistance Levels is Par (1:1)

May 11, 2016

Currencies readily alternate between cycles of appreciation and depreciation, but it is a much rarer event for a currency’s unit of account to transition from being weaker than another to being worth more.  Put differently, movements through par, or in the case of USD/JPY 100:1, happen very infrequently.  Take the key EUR/USD relationship, now almost […] More

Covert Currency War Games

May 3, 2016

Even with U.S. monetary stimulus being throttled back and other central banks pressing harder on the stimulus pedal, the pace of policy change thus far and in the future will be too gradual to make a huge difference in a direct way through their influence on short- and long-term interest rate differentials.  The cutting edge […] More

Chernobyl Anniversary, Five U.S. Primaries, and Firmer Oil Price

April 26, 2016

Today is the 30th anniversary of the nuclear reactor accident in Chernobyl.  That event still constrains use of nuclear power even as the planet continues to warm. Today’s U.S. presidential primaries are in Pennsylvania, Maryland, Connecticut, Delaware, and Rhode Island.  384 Democratic Party delegates and 118 Republican delegates are at stake.  Trump is expected to […] More

A Most Peculiar Year

March 2, 2016

Face it, anticipating the movements of currencies has never been intuitive, and it’s hard to recall a time quite as confusing as the present.  The United States, Britain, eurozone, Japan, China and Brazil each face economic and political crossroads of enormous importance. United States:  The presidential primaries have highlighted an extremely high level of voter […] More

The Year is Still Young, Yet Already Full of Surprise

February 17, 2016

The first eighth of 2016 was eventful.  The surprises are not limited to China and other developing economies, either. Financial markets have been very volatile.  Although near the middle of its high-low range thus far, the price of oil is down around 16% on balance, and gold is more than $100 above its end-2015 level.  […] More

A Nation and World Turns its Ear to Janet Yellen

February 9, 2016

Janet Yellen will be testifying Wednesday on the U.S. economy and monetary policy before the House Financial Services Committee and reprising her message Thursday to the Senate Banking Committee.  Formerly known as the semi-annual Humphrey-Hawkins Hearings, Congress can be an unfriendly audience for Fed Chair-persons, especially in election years like this one.  Yellen’s task will […] More

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