Tag Archives: 4) FX Trends

Marc Chandler I had the opportunity to join Professor Hanke to discuss the crisis in Turkey. The professor sketched out his view expressed in a recent op-ed piece in the Wall Street Journal, arguing that Turkey is best served by adopting a currency board, anchoring the lira to hard currency, like the euro or dollar, or gold. I do not see Turkey’s problem being essentially a currency crisis, but a broader crisis of...

Swiss Franc The Euro has fallen by 0.41% to 1.1282. EUR/CHF and USD/CHF, August 14(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates Corrective pressures grip the capital markets today, helped by the easing of the selling pressure on Turkey, but its more a respite than a relief as no new policy initiatives are behind the lira’s upticks. The implication of this is that it...

The euro appears to have carved out head and shoulder top. As this Great Graphic depicts, the euro was sold through the neckline at the end of last week and is 1% below it today. It is not unusual for the neckline to be retested. It is found near $1.15. It also dovetails with our near-term caution given that the euro is likely to close below its Bollinger Band for the second consecutive session (~$1.1440). The left...

Swiss Franc The Euro has risen by 0.12% to 1.1351. EUR/CHF and USD/CHF, August 13(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The failure of Turkey to grab the bull by the horns, so to speak, and come to grips with the situation saw the dollar soar above TRY7.23(from TRY6.43 at the end of last week) and to ZAR15.55 (from ZAR14.09). The Mexican peso, the strongest...

The US dollar surged last week, with the Dollar Index rising 1.25%, the most since April. The dollar is being boosted by two drivers. The first is the policy mix and interest rate divergence. The other is the intensification of pressure on emerging market. Turkey has a disastrous combination of more fundamentals, large short-term foreign currency debt obligations, unorthodox policies, and the lack of credibility. On top...

Chimerica always seemed like an oversimplification of a complex and dialectic relationship between the US and China. However, it did express an underlying truth, that China’s rise over the last 40 years has been predicated on Deng Xiaoping’s political and economic reforms and, importantly, the world of free-trade (a reduction in tariff barriers to trade) promoted by the United States. America seems to hold two seemingly...

Swiss Franc The Euro has fallen by 0.81% to 1.1355. Even more than the dollar, the Swiss Franc has muscled today. EUR/CHF and USD/CHF, August 10(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar has surged. The main impetus comes from the dramatic slide in the Turkish lira.  After moving above TRY5.0 yesterday, it reached TRY6.30 today before stabilizing a...

Swiss Franc The Euro has fallen by 0.48% to 1.1476 CHF. EUR/CHF and USD/CHF, August 09(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The global capital markets are mostly quiet. US sanctions on Turkey and Russia are pressuring their respective currencies, and the New Zealand dollar has slumped nearly 1.5% on the back of a dovish hold by the central bank. The Kiwi is...

The withdrawal of the US from the Trans-Pacific Partnership trade agreement lift it exposed on two fronts. First, the TPP was going to modernize the NAFTA. Without, the US remains locked in protracted negotiations. A breakthrough in talks with Mexico has been reportedly imminent for weeks. Talks with Canada have apparently not progressed very far in recently, and the US insistence on a sunset clause remains a...

Fears that the UK could leave the EU in a little over six months without an agreement continues to drag sterling lower. Recall that over the weekend, the UK’s International Trade Minister Fox suggested there was a 60% chance of a no-deal Brexit. A few days earlier BOE Carney said that although it was not the most likely scenario, the risks such a departure were “higher than comfort.” Sterling is lower for a fifth...