Dollar
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
Dollar Affected by Diverging Monetary Policy Stances
November 2, 2015
Quite a few central banks will be holding interest rate policy meetings this week. These include the Reserve Bank of Australia, which also releases a new quarterly policy statement and the Bank of England, whose meeting coincides with its quarterly Inflation Report. The list also includes central banks in Iceland, Thailand, Poland, Norway, Malaysia, the […] More
Defining Fed Policy and What to Expect from the Dollar
September 29, 2015
A succession of changes occurred starting in the early to mid-1990s in how U.S. monetary policy is communicated to the public. What the Fed was doing and why became much more transparent. Policy was extremely opaque a generation ago –no minutes, no forward guidance, no immediate FOMC statement explaining a change, no post-meeting press conferences, […] More
A Stale Currency Market Landscape
August 10, 2015
In these dog days of August, currency movements cannot be trusted to represent the current state of relative economic fundamentals between countries, nor even expectations of future economic and financial market trends. Superimposed upon this seasonal time of limbo, summer 2015 finds investors stuck with a set of uncertainties that has grown stale. Foremost among […] 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
