Euro

Super-Charged Euro and Other Big Market Changes after French Election

April 24, 2017

The centrist candidate, Macron, and not anti-euro Le Pen, won the first round of France’s presidential election on Sunday. Le Pen came in second place with 2.5 percentage points fewer votes than Macron, but initial opinion polls are giving Macron a decisive edge heading into their run-off vote on May 7. In response, the dollar […] 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

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

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

Euro Resistance Near $1.1000 Continuing

December 29, 2015

The dollar is unchanged against the euro, Swiss franc, Chinese renminbi, and Japanese yen.  The euro’s uptrend has met repeated resistance around $1.097. Spain’s unsettled political outlook has been a depressant. The greenback is 0.2% firmer against the loonie and sterling but 0.3% softer relative to the Australian and New Zealand currencies. Following a 2.0%plus […] More

Why Might the Dollar Uptrend Be Stalled?

July 21, 2015

On paper, prospects for dollar appreciation continue to look very sound.  Monetary policy cycles will be extremely disparate over the next two years between the United States on the one hand and the eurozone, Japan and emerging markets on the other.  Gold’s relentless slide suggests considerable continuing confidence in a dollar uptrend, especially in light […] More

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