Can’t Get There from Here

February 21, 2013

A state of considerable uncertainty always surrounds financial decisions that need to be made.  In the past, there tended to be more type A uncertainty among currency market participants than now, which results when people believe they understand cause-and-effect relationships better than they in fact do and as a result under-appreciate the complexity of predicting […] More

Trade-Weighted Movements in the Dollar, Euro, Pound and Yen

December 26, 2012

Using period averages, I compared trade-weighted currency indices this month to December 2011, December 2007 and December 2002 to gauge how the dollar, euro, sterling and yen had changed value over the past year, past five years, and past ten years. Net change in the U.S. dollar amounted to less than 1.0% since end-2011 and […] More

A Sideshow

December 7, 2012

The striking trait about recent movement in key dollar relationships is their continuing unremarkability.  Very interesting stuff has been happening on the policy front, and this is the sixth straight December in which investors have compelling grounds to be unhappy about the state of most developed economies and many emerging markets.  But the thrill seems […] More

Currencies Remain Mostly Calm Ahead of the U.S. Fiscal Waterfall

November 30, 2012

Net movement in the currencies of major advanced economies have been comparatively small during the second half of 2012.  The yen has exhibited the greatest weakness, a slide of 3.2% against the dollar, but virtually all that loss occurred within the past month.  The U.S. currency otherwise has depreciated 2.5% or less against the euro, […] More

Currencies Not the Main Market Attraction

November 15, 2012

Economic conditions still look bleak in the United States, Euroland, Britain and Japan a little more than five years after the start of the global financial crisis.  Between the third quarters of 2007 and 2012, real GDP climbed only 0.5% per annum on average in the States, while sliding at a 0.3% annual rate in […] More

A Telling Week in Foreign Exchange

September 14, 2012

Market reactions to the ECB and Federal Reserve monetary initiatives this month have clarified why the euro fell earlier this year and exposed underlying vulnerability in the dollar.  Euro weakness reflected the perceived imminence of a breakup among common currency users and not very much else.  In turn, dollar sentiment appears more fragile than comparisons […] More

Endless Waiting for Uncertainty to Lift

August 17, 2012

Uncertainty continues to be one of the most frequently heard financial market buzzwords.  The term encompasses the reality that many pertinent pieces of influential information cannot be guesstimated accurately.  Investors end up sitting on the sidelines, waiting in vain for some clarification that never comes.  Consensus expectations aren’t necessarily frozen, but opinions are held with […] More

Entering the Summer Season of Currency Trading

May 25, 2012

The summer season for currency market participants, which lies between the U.S. Memorial Day and Labor Day weekends, has a wholly different feeling from the winter/spring or autumn trimesters.  Because of the comings and goings of vacationing dealers, summer volume tends to be more volatile, depriving the marketplace of the depth, breadth and resiliency found […] More

Dangerous to do Business

May 11, 2012

Risk aversion is back in vogue.  One saw this in equities more quickly than in foreign exchange.  Investors can think of many reasons to be averse.  The May 6th elections in Europe improved the probability of Greece leaving the common currency bloc in 2012. Four years and 10 months after the onset of the global […] More

Currency World at First Quarter-end 2012

March 30, 2012

From a government perspective, chronic currency appreciation is undesirable.  In the quarter now ending, officials in Japan, China, and Switzerland did their utmost to keep a lid on the yen, yuan, and franc.  A drop in the yen of more than 6% against the dollar helped lift Japan’s Nikkei-225 by 19.3% in the quarter, some […] More