Dollar

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

Tougher Dollar Sledding Against the Euro and Yen

February 1, 2016

The strong dollar performance of 2015 carried over into the first month of 2016 against a large number of currencies.  Appreciation last month was most pronounced against commodity sensitive currencies and emerging economy monies and also included the performances against the Swiss franc and sterling. The dollar’s two most influential relationships moved only slightly on […] More

What to Make of Three Helter Skelter Weeks that Felt Like a Year

January 21, 2016

Central bankers tend to be cautious and not prone to scrapping a forecast on the basis of a couple of difficult weeks when developments haven’t jived with baseline assumptions.  But there was the ECB President today declaring that “downside risks have increased again and citing a trio of causes — increased uncertainty surrounding emerging markets, […] More

Some Things for Currency Market Participants to Watch in 2016

January 5, 2016

Brazil, China and Russia This trio of emerging markets comprises three-fourths of the BRIC group.  Not long ago when each of these economies were performing well, the group was seen as the beneficiary in a gradual shift of economic and political influence at the expense of the Group of Seven advanced economies.  2015 was a […] More

Current Accounts Matter, Too

November 9, 2015

Across-the-board improvement in last Friday’s U.S. labor market statistics lifted the dollar as high as 1.0706 per euro.  That’s a net gain of over 6.0% since October 21.  Expectations are now strong that the federal funds rate will be raised next month and that ECB monetary policy will be eased as well.  It’s not often […] More

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