Third-Quarter Wind-Down

September 30, 2010

Many data releases arrived on this final day of the third calendar quarter.  Sentiment is better toward Europe and more guarded about Japan and the United States.  ECB 12-month and 6-month loans totaling EUR 93 billion are expiring.  EUR 28 billion of 3-month ECB liquidity is not getting rolled over, as a EUR 104 billion […] More

Softer Pound on a Quiet Day

September 6, 2010

Canadian and U.S. markets will be shut today for Labor Day holidays. No meaningful data releases from markets that are open. Main currency movements have been a 0.6% drop of sterling, a 0.4% further recovery of the kiwi, and a 0.3% advance of the Chinese yuan. Market chatter surfaced that the Bank of England may […] More

Few Feeling Confident or Lucky on This Friday the Thirteenth

August 13, 2010

A mid-August Friday afternoon and Friday the thirteenth no less would be a precarious place for currency traders to sit in the best of circumstances, and these are certainly not that.  Trouble lurks wherever one peers, and the market reaction is risk aversion. Start with the U.S. economy because that is where perceptions have been […] More

July in Figures

July 31, 2010

July was a month of lessening risk aversion in spite of mounting concern about U.S. and Japanese growth prospects and continuing unease over the fiscal austerity that is coming to Europe.  The dollar fell across the board, and significant stock market losses in the second quarter were trimmed unevenly.  Ten-year sovereign debt yield changes for […] More

Weak Euro Helping Europe and Hurting the United States

July 23, 2010

In disinflationary or deflationary times, it pays to have a depreciating currency.  This lesson was underscored in the Great Depression when Britain went off the gold standard before the United States.  The pound fell, and Britain’s economy faired better than America’s.  The lines of causation between exchange rate changes and economic fundamentals do not only […] More

A Lack of Confidence in Just about Everything

July 16, 2010

Investors have turned skittish.  One sees this in wildly volatile stock prices – perhaps a sign of the summer season – but also in a sub-0.60% two-year Treasury yield and a 1.10% ten-year JGB yield.  The resurgence of risk aversion ought to lend the dollar support, but the currency instead experienced a difficult week.  That […] More

Currencies More Sensitive to Global Growth Than Growth in Particular Economies

July 9, 2010

A more resilient euro has coincided with better-than-expected European data, but the rise from $1.1878 in early June doesn’t reflect strong confidence the short-term to medium-term economic outlook for the region.  Industrial production during May recorded monthly advances of 2.6% in Germany, 1.7% in France, 1.0% in Italy, 2.6% in Sweden and 0.7% in Britain.  […] More

Stronger Dollar Against Euro, Yen and Swiss Franc

July 9, 2010

The dollar has risen 0.5% against the Swissy, 0.3% versus the yen, euro, and Aussie dollar, and 0.1% relative to the Canadian and New Zealand dollars.  The dollar is stable against sterling and the yuan.  The U.S. Treasury Department’s 3-month delayed semi-annual foreign exchange report was released yesterday and did not declare China a “currency […] More

Midyear Reality Check of the Currencies

July 2, 2010

At the very least, the dollar is in a pause.  During the week that bridged the second and third quarters, the dollar hit its weakest levels against sterling ($1.5231) and the Swiss franc (1.0581 per USD) since early May.  The euro posted a high today of $1.2613, its best level since May 21 and 6.2% […] More

Cynicism Over Euro Area Debt and Beijing’s Yuan Policy Sends Stocks Lower

June 22, 2010

Equiites fell by 1.2% in Japan and Australia, 0.7% in India, and 0.5% in South Korea, Singapore, Sri Lanka and New Zealand.  Downward pressure intensified in Europe where stocks so far show losses of 1.8% in Madrid, 1.6% in Paris and and London, and 1.0% in Frankfurt.  U.S. futures are lower, too. The yuan trimmed […] More