Tag Archives: FX Trends

This Great Graphic, created on Bloomberg, depicts the CRB Index, a basket of commodity prices.   The technical picture has deteriorated, and the price action in the coming sessions is particularly important in determining outlook.   The CRB Index put in a double bottom.  On January 20 and February 11 lows were set just below 155.00.   The neckline of the double bottom was created in the rally between the two bottoms.  It is found near 168.00.   The measuring objective is found by...

It is widely recognized that the sharp depreciation of the Japanese yen has not lifted Japanese export volumes.  In December 2015, Japanese export volumes had fallen 4.4% year-over-year after rising 3.9% in December 2014 and 2.5% in December 2013.  These are a number of explanations for this counter-intuitive result given the yen's past depreciation.  First, global demand is weak.  Second, has adopted a direct investment strategy rather than an export-orientation.  For example, many of...

The US dollar is mostly lower as the North American session is set to begin.  The holiday in many centers, especially in Europe, has limited activity, and a few orders seemed to drive prices., which remain within the recent ranges.  The Japanese yen is the main exception.  The greenback's gains have been extended into the seventh session, the longest such streak since October.  The dollar neared JPY113.70, its best levels since the FOMC meeting.   However, local press reports denying that...

There are four events that will shape market psychology in the week ahead.  They are Yellen's speech to the NY Economic Club, US jobs data, eurozone March CPI and PMI, and Japan's Tankan Survey.   The broad backdrop is characterized by the rebuilding of risk appetites since the middle of February, though the MSCI emerging market equity index put in its low on January 20, as did the CRB Index.  The price of oil appeared to bottom then as well, but it retested the lows in mid-February and...

The most extreme speculative positioning, judging from the futures market is the long yen position.  The bulls added another 3.4k contracts, lifting the gross long position to 82.8k contracts.  The record was set in 2008 at 94.7k contracts.   The gross short position was trimmed by 4.5k contracts, leaving 29.5k.  It is the smallest gross short position since before Abe was elected in Prime Minister in 2012.  The net long yen speculative position rose to 53.3k contracts.  The record was...

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction.  It was helped by widening interest rate differentials.  Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note.  With new orders rising, it is reasonable to expect the momentum to carry into Q2.   Nearly half of the regional Fed presidents spoke last week, and the general...

The US dollar rose against all the major and most emerging market currencies last week. After selling off following the ECB and FOMC meetings, the dollar found better traction.  It was helped by widening interest rate differentials.  Regional Fed manufacturing surveys for March suggest the quarter is ending on a firm note.  With new orders rising, it is reasonable to expect the momentum to carry into Q2.   Nearly half of the regional Fed presidents spoke last week, and the general...

The holiday shutters most markets today.   Several Asian markets were open, and equities were narrowly mixed, with Japan and China posting small gains.  Most of the other local markets, including Australia, Korea and Taiwan slipped.  The US dollar is trading with a firmer bias, but mostly, as one would expect, within yesterday's ranges.    Three observations are worth sharing.  First, within the modest movement today, sterling is the weakest of the major currencies, as it has been for...

We have been looking for a bottom in the US dollar against the Canadian dollar.  It is been difficult, but now it appears that the technicals are turning.  This Great Graphic, from Bloomberg, shows that the US dollar is moving above a trend line down off the January 20 high just below CAD1.47. The downtrend line connects the late February high and the mid-March high.  It intersects today near CAD1.3200.  The 20-day moving average, the green line, also caught the February and mid-March...

Helicopter money is the rage.  Central banks are talking about it.  Economists are debating it.  The media is rife with coverage.     While it sounds important, it is not precisely clear what helicopter money means.   It appears to have originated with Milton Friedman.  In 1969, he wrote: "Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us...