Tag Archives: FX Trends

Summary Sterling’s losses are not simply a product of thin liquidity or panic. Both main political parties are in disarray just when strong leadership is needed. The rough projection pre-vote of what could happen on Brexit suggests $1.20-$!.2750. This Great Graphic shows sterling’s monthly performance since 1971, according to Bloomberg data. There have been several powerful trends. The rally from $1.40 to $1.50...

Summary Sterling falls through last week’s low. Spanish election results suggest a UK is not necessarily a harbinger to anti-globalization forces. Yuan sells off and China breaks diplomatic contact with Taiwan. FX Rates Sterling has been sold beyond the panic low seen when it became clear that UK voters were choosing to leave the EU though nearly every economists warned of at least serious short- to...

Summary Center-right PP won the Spanish election. Anti-EU forces were setback. Rajoy needs a coalition partner. The UK has decided to seek a divorce from the EU after a 43-year rocky marriage. It was not an overwhelming decision.  Brexit won by 52%-48% margin, seemingly too small for such a momentous decision. The UK has not decided exactly when it will formally begin the divorce proceedings, and it wants to be...

The EU response to Brexit is important. The EU summit and the talks with Turkey are very important. Brexit leaders seem as surprised and unprepared for the results as anyone. And a preview on economic data for the week. The UK choice to leave the EU on a 52%-48% vote is one of those moments that define before and after. It is true that there are examples of the EU not liking the outcome of a referendum and allowed a...

Click to see the video. About a dozen hours after it became clear that a slight majority of the British voters favored leaving the UK, the Financial Times’ John Authers visited me at Brown Brothers Harriman  to discuss the initial implications.  The situation is very fluid and there are many moving pieces.  In Chinese, the characters for crisis are “danger” and “opportunity.”  The danger component is the first cut...

On the Swiss Franc: The data shows that the Net positioning in the Swiss Franc barely changed, as of June 21, when compared to the previous week. The CFTC reporting week ending June 21 covers the day FOMC and BOJ meetings and ends two days before the UK referendum. The overarching theme was the reduction of exposure.  This is not measured by net positions but by gross positions. Of the eight currencies we track,...

EUR/CHF The Euro-Swiss remained nearly stable at the begin of the week. It peaked shortly before the Brexit referendum, when traders were anticipating a yes. It found its trough when the No was published. We showed the obvious SNB intervention that started at 7.45 am. on Friday. FX Rates June 20 to June 24, 2016 click to enlarge, Source Yahoo Finance USD/CHF After being nearly stable during the week, the dollar...

SNB interventions During the Brexit turmoil on Friday, the Swiss National Bank has intervened in markets. Just after they got into the office, at 7.45 am CET, they started the interventions. Apparently the Singapore office did not have a mandate to do interventions. The central bank drove the EUR/CHF price from a low of 1.0646 towards 1.08. FX traders might have moved it higher to 1.0850. We do not think that the...

The UK’s referendum is underway.  The capital markets are continuing the move that began last week with the murder of UK MP Cox.  The tragedy seemed to mark a shift in investor sentiment.  Sterling bottomed on June 17 just ahead of $1.40.  Earlier today in Asia, after more polls showed a move toward remain, sterlingrallied to almost $1.4845, its highest level since last December. The market continues to put anticipate...

Summary Turkey and the EU will begin negotiations over financial and budget reform. It is one of 35 areas (chapters) of negotiations. Turkey is no where close to joining the EU, for which it initially applied in 1987. In the vitriolic debate over the UK’s membership of the EU, Turkey’s potential membership became one of the talking points.  Prime Minister Cameron, who has advocated Turkey’s eventual membership,...