Tag Archives: USD

Swiss Franc EUR/CHF, September 23, 2016Click to enlarge. FX Rates As Nassim Taleb instructed, we should not be fooled by randomness. If you see six red results in a row at a roulette table, do not conclude the game is rigged. If you flip a coin, and it is tails six consecutive times, the contest is not necessarily rigged. Today has the making of the sixth consecutive Friday that the dollar gains against the euro...

Swiss Franc Once again the Swiss Franc was the strongest. The EUR/CHF depreciated to 1.0875. As said yesterday, the reasons: the Fed and the strong Swiss trade balance. Click to enlarge. FX Rates The US dollar has lost another 0.5% against most of the major currencies today, as Asia and Europe respond to the Fed’s decision. There are few exceptions to this generalization. The Norwegian krone has gained nearly...

Swiss Franc The EUR/CHF accelerated its decline since yesterday’s strong Swiss trade balance data. The second reason was certainly the Fed decided to keep rates unchanged. We know that the Swiss Franc has similar “counter-dollar” status as gold. Click to enlarge. Japan Much of what the Bank of Japan announced today had been largely leaked. While there was a sizeable response in the asset markets, the dollar’s...

Swiss Franc For us the developments in the trade balance express if a currency is overvalued or not (more details here). The Swiss trade surplus is constant or rather rising, hence the Swiss Franc is correctly valued or rather undervalued.And – as we see below – the franc appreciated. Switzerland Trade Balance(see more posts on Switzerland Trade Balance, )Switzerland Trade Balance – click to enlarge. FX Rates...

[unable to retrieve full-text content]The US dollar, which finished last week on a firm note, is under pressure to start the new week that features Bank of Japan and Federal Reserve meetings. The slighter stronger August CPI reading helped lift the greenback ahead of the weekend, but investors continue to see a low probability of a Fed hike this week.

[unable to retrieve full-text content]Median household income was higher in 2015 than in 2008, but still below 1999 peak in real terms. The bottom fifth of households by income have just recouped what was lost. Income growth did best under (Bill) Clinton and Reagan, including for top 5%. Origin of strong dollar policy means it will not be used as a trade weapon and it hasn't since Bentsen.

[unable to retrieve full-text content]Shifting intermarket relationships pose challenge for investors. The market is convinced the Fed will not raise rates. Greater uncertainty surrounds the BOJ; there seems less willingness to shock and awe.

Summary: Bonds are not rallying despite poor US data. Greater chance that Trump gets elected than the Fed hikes next week. Berlin may be more important than Bratislava. (Two week business trip is winding down, leaving London tomorrow and will be in Canada for the first couple days of next week, then back to NY.  Sporadic posts to continue. Thanks for your patience) Yellow lights are flashing. Bonds remain...

Swiss Franc As happened very often, traders expected more the SNB monetary assessment. And, as usually, the franc finally appreciated because the SNB did not act. Click to enlarge. FX Rates Looking at the diary, today is the most important day of the week. The Bank of England and the Swiss National Bank meet. The UK reports retail sales. EMU reports CPI figures. The US reports retail sales, industrial output, and...

Summary: Global interest rates are rising. Something important is happening. It appears to be dollar positive. Price is Right – click to enlarge. The market has not changed its mind. Following Brainard’s comments yesterday the market had downgraded the chances, which were already modest, of a Fed hike next week.  The September Fed funds futures is unchanged on the day.  The implied yield of 41 bp matches the...