Dollar Uptrend Substantial Already

November 12, 2014

Despite deepening concern about the euro area’s economic outlook, the dollar’s recovery versus the euro understates the U.S. currency’s overall turnaround.  EUR/USD had declined slightly less than 10% since the start of 2014 but only 5.5% since the end of 2012.  Almost 7/8ths of a 33% plunge in the Russian ruble since end-2012 happened this […] More

Spotlight on Japan and APEC Meetings

November 11, 2014

Dollar/yen hit a new high for the move of 116.12 and shows a net overnight advance of 0.9%.  The yen also touched a low of 144.02 per euro. The Japanese Nikkei gained 2.1%, supplanting 17K to 17,124.  The ten-year Japanese JGB yield rose four basis points to 0.48%.  Greater optimism toward Japan’s outlook has followed […] More

Volatile Markets in Aftermath of Republican Big Win

November 5, 2014

Republicans retook control of the Senate and will hold at least 52 of the 100 seats.  Republicans defended the House of Representatives where they will hold at least 56% of the seats.  Republicans also will control 5/8ths of the state governorships.  In more cases than not where Republicans won, the margin of victory was greater […] More

Significant Monetary Policy Changes in Japan and Russia

October 31, 2014

Quantitative and qualitative monetary stimulus was expanded sharply in Japan by a 5-4 vote, with the central bank governor and two deputy governors siding with the majority.  The impact of the decision to boost annual JGB buying from 50 trillion yen to 80 trillion yen, triple holdings of ETFs and J-REITS, and lengthen the average […] More

Financial Trick or Treat

October 22, 2014

The ‘Trick or Treat’ greeting of Halloween revelers offers a choice of extremes.  The handover of a holiday sweet is a happy moment for giver and receiver alike, while the contrary exchange of an act of vandalism for getting no candy leaves all parties dissatisfied.  There’s no middle ground, and so it has been for […] More

Bolder Official Efforts to Influence Currency Movements

September 25, 2014

Officials outside the United States had for some time been frustrated by the weakness of the dollar in spite of superior U.S. fundamental economic comparisons of real growth, labor market conditions, and interest rates.  Now that the Federal Reserve’s third round of quantitative easing is wrapping up and speculation is heating up about an initial […] More

A Strong Dollar Is in the Best Interest of Everybody Else

September 11, 2014

In the mid-1990s, former U.S. Treasury Secretary popularized the phrase that “a strong dollar is in the best interest of the United States.”  What he meant was that if the dollar is expected to appreciate, it will suppress actual and expected U.S. inflation, reduce long-term interest rates, promote business spending and direct investment inflows by […] More

September Introduces New Stuff to Watch in Currency Trading

September 4, 2014

The ECB announced some meaningful stimulus today.  The Bank of Japan, which made its big play, is now the central bank in need of stimulus that seemingly fallen behind the curve.  The tone of U.S. data has progressed this year from disappointing to mixed to, most recently, increasingly positive.  And the dollar this week has […] More

Dollar Uptrend Extended after U.S. Labor Day Weekend

September 2, 2014

The dollar rose to a 1-year high of $1.3110 and a 7-month high of JPY 105.03.  From Monday closing levels, the dollar currently shows gains of 0.6% against the yen and kiwi, 0.5% relative to the Australian dollar and sterling, 0.4% versus the loonie, and 0.1% vis-a-vis the euro and Swiss franc.  The yuan is […] More

A Modest Proposal

August 14, 2014

Tomorrow will mark the 43rd anniversary of the most famous event in modern currency market history.  I refer to former President Nixon’s decision to sever the dollar’s link to gold.  The dollar devalued four months later in a vain attempt to reestablish fixed parities.  A second dollar devaluation followed 14 months afterward in February 1973, […] More