Tag Archives: 4) FX Trends

The Federal Reserve did what it was widely to do. The fed funds target range was lifted 25 bp to 2.00-2.25%. Three-quarters of Fed officials anticipate a hike in December. The market had discounted around an 80% chance. The Fed sticks with the three rate hikes in 2019 and one in 2020. The year-end rate in 2021 is the same as in 2020. The Fed is signaling that it does not expect the fed funds target to move above...

Swiss Franc The Euro has fallen by 0.49% at 1.1317 EUR/CHF and USD/CHF, September 28(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar’s post-Fed gains have been extended, though the upside momentum appears to be stalling. Japan’s Nikkei advanced 1.35% on the back of the yen’s declines and reached its highest level since 1991. Chinese shares (A and H)...

Swiss Franc The Euro has risen by 0.13% at 1.1373 EUR/CHF and USD/CHF, September 26(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar is trading with a softer bias in tight ranges. The euro and sterling have been confined to yesterday’s ranges, while the greenback briefly traded above JPY113.00 for the first time in two months. The South African rand and Turkish...

Swiss Franc The Euro has risen by 0.35% at 1.137 EUR/CHF and USD/CHF, September 25(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The major currencies are mixed in quiet turnover. Most of the European currencies are firmer, while the dollar-bloc currencies, yen and Swiss franc are softer. Emerging market currencies are steady to higher, though there are a few...

It is a testament to the Federal Reserves communication and the evolution of investors’ understanding that we can say that the rate hike that the central bank will deliver is not as important as what it says. A rate hike is a foregone conclusion. According to the CME’s model, there is about an 85% chance of December hike discounted as well. The effective Fed funds rate is 1.92% with the target range of 1.75%-2.00%. The...

Boosted by tax reform, deregulation, and strong earnings growth, US equities have motored ahead, leaving other benchmarks far behind. As the Great Graphic here shows, most of the other benchmarks are lower on the year. The S&P 500 (yellow line) is up 8.8% for the year before the new record highs seeing seen now, while the Dow Jones Stoxx 600 from Europe (purple line) is still off 1.7%. The MSCI Asia Pacific Index...

Swiss Franc The Euro has fallen by 0.40% at 1.1244 EUR/CHF and USD/CHF, September 20(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The euro poked through $1.18 for the first time since the June ECB meeting. There is an option for about 740 mln euros that expires there today and another at $1.1775 for 890 mln euros. That June high was near $1.1850, which was a five-high. If...

Swiss Franc The Euro has risen by 0.46% at 1.1303 EUR/CHF and USD/CHF, September 19(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The dollar initially extended its gains against the yen, reaching JPY112.45 before some profit-taking was seen. There is a $1.7 bln option at JPY112 that expires today. It looks safe today after yesterday’s big outside up session-where the...

The US dollar is beginning the new week on a soft note, as China threatens not to accept the invitation for trade talks in Washington if the US imposes new tariffs on $200 bln of its goods, which the Wall Street Journal reports could come as early as today. Meanwhile, the MSCI Emerging Markets Index is giving back half of the 2.5% rally seen in the second half of last week. The Turkish lira is leading the emerging...

The trajectory of monetary policy in the US and Europe has been fairly clear. There is practically no doubt that the Fed will hike rates on September 26. Despite softer than expected PPI and CPI figures, the market has become more confident of another move in December. The Federal Reserve’s balance sheet unwind reaches its maximum velocity of $50 bln a month in Q4. Eurozone It is also understood that ECB will reduce...