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

Dollar Emerges Strong after Two Mistrusted Deals

July 16, 2015

The first of two agreements reached this week pitted the Greek people against the country’s creditors.  It avoided the feared precedent of a member leaving the currency union but did so at enormous cost to the euro’s reputation.  To Greece’s partners, the struggle ended with victory for the principle that rules governing common currency area […] More

Not the Result Markets Had Been Assuming

July 8, 2015

In this age of uncertainty, the baseline scenarios adopted by investment houses on key assumptions invariably assume growth-promoting outcomes.  Marketing considerations are the driver behind this forecasting bias.  Optimism sells, while pessimism does not.  Also, modeling foreign exchange and other financial market trends  is far more manageable with happy endings where unanticipated shocks occur from […] More

Upside Dollar Potential

June 10, 2015

The dollar is in a corrective phase.  From the low in 2014 to this year’s high, the dollar advanced 33.8% against the euro, 26.2% against the Australian dollar, 25.7% relative to the kiwi, 24.9% vis-a-vis the yen, 22.1% on a trade-weighted basis, 21.3% versus the Canadian dollar and 18.0% against sterling.  Varying percentages of these […] More

Whipsawed Beyond All Recognition

May 5, 2015

The dollar is one of many financial market prices caught up in a period of intense oscillation.  Over the past five trading days, the DOW fell 1.6%, recovered 1.9%, and declined over 1.2%.  After declining from 0.39% on March 6 to 0.07% on April 20, the 10-year German bund yield rebounded to 0.51% today.  The […] More

Dollar Paused in Troubling Times

April 22, 2015

In spite of disappointing U.S. growth for a second straight quarter, dollar demand sizzled in January-March.  Trading has been consolidating this month, and not merely pausing after such an upward spurt or even because of some convergence of macroeconomic trends between the United States and Europan.  These are disturbing times.  Each day, more bad news […] More

Dollar Recovery in a Lull

April 16, 2015

Coming into April, the dollar had experienced a rally of historic proportions, topped off by advances of more than 9.0% in the first quarter against the euro, yen, Swissie and both Canadian and Australian dollars.  In the current month, however, upward dollar momentum has slowed substantially for a variety of reasons. A broad spectrum of […] More

Is the Dollar Uptrend Over or Merely in a Pause?

April 9, 2015

It’s difficult to gauge momentum behind the dollar’s uptrend by focusing upon bilateral currency relationships.  Market-determined currencies like the euro, yen, Swissie, sterling and Australian, Canadian and New Zealand dollars have not moved in lockstep since the dollar’s current rally began about eleven months ago, nor have the cumulative swings in the dollar against each […] More

Euro Down Ahead of U.S. February Labor Market Data

March 6, 2015

The euro fell in the wake of yesterday’s ECB press conference and is down an additional 0.9% against the dollar overnight, hitting a new low for the move of $1.0929.  The U.S. currency otherwise rose 0.2% versus the kiwi and 0.4% against the Swiss franc and sterling.  At the same time, the dollar has fallen […] More

An Abbreviated Weekly Dollar Essay

March 4, 2015

Snow shoveling duty will limit the length of the dollar essay this week to a couple of developments worth watching. The first is explained in an earlier posting today on Currency Thoughts that documents a very sharp narrowing of the U.S. and eurozone purchasing managers indices between November 2014 and last month.  This convergence in both […] More