Dollar
March and First Quarter in Figures
April 1, 2017
March saw an introspective pause to the market euphoria of the first two months of 2017, but the quarter still experienced a broadly lower dollar and strong stock market gains for the most part, the Japanese Nikkei being a notable exception. Ten-year sovereign debt yields were mixed and resulted in less supportive U.S. premiums at […] More
February in Figures
February 28, 2017
Equities were bid sharply higher in February, and the dollar appreciated mostly. Ten-year sovereign debt yields, which had risen during January, reversed course. Short-term interest rates were steady, and commodity prices climbed. 10-Yr Yield o2/28/17 01/31/17 Chg v End-Jan U.S. 2.38% 2.45% -7 Basis Points Germany 0.20% 0.43% -23 Japan 0.04% 0.07% -3 U.K. 1.15% […] More
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
