Tag Archives: USD

EUR/CHF The EUR/CHF moves lower, following the descent of  EUR/USD. This happens often, when European and global growth is sluggish. USD/CHF But the Swiss franc weakened against the dollar. Continued by Marc Chandler: The US dollar was mostly firmer over the past week.   There were two exceptions among the major currencies:  Sterling and the Canadian dollar.   GBP/USD Many linked sterling’s outperformance (+0.8%) to a growing sense that the UK will vote to remain in the EU,...

For various reasons, well beyond the scope of this short note, China has amassed huge industrial capacity, well beyond its ability to absorb.  In part, that is one of the challenges that the “One Belt One Road” addresses.  Export the spare capacity by building infrastructure, networking east and central Asia (included parts of the former Soviet Union and the Middle East. Even that long-term project does not appear sufficient to absorb the existing surplus capacity.  Many US and European...

The US dollar is winding down the week on a firm note, but still in a consolidative mode.  The euro and yen and Australian dollar are well within yesterday’s ranges while sterling and the Canadian dollar pushing through yesterday’s lows. Source Dukascopy  Asian shares were mostly higher, though Chinese markets closed with slight losses.  The MSCI Asia-Pacific Index rose (~0.7%) for a third session and secured a 2% gain for the week.    European bourses are seeing some profit-taking...

Many investors still think about gold as if it were money.  Economists identify three functions of money: store of value, means of exchange, and a unit of account. It can be a store of value, but the price fluctuates compared with other forms of money, or other commodities, like oil or silver.  Some argue that it is a store of value because of the limited supply, but that argument applies to many other goods, including commodities and real estate (which Mark Twain said you have to...

The G7 heads of state summit has begun.  The host, Japan’s Prime Minister Abe began with doom and gloom.  Accounts suggest he warned of the risk of a crisis on the scale of Lehman if appropriate policies are not taken.  It is not clear to whom Abe was addressing.  It may not have been the other heads of state. It may have been a domestic audience Abe had in mind. At the finance ministers and central bankers meeting last week, Japan’s Aso indicated that contrary to speculation, the retail...

The US dollar is trading with a softer bias today after the momentum stalled yesterday.  The pullback is shallow but could be extended a bit more in the North American session.  The US reports weekly jobless claims, durable goods orders and pending home sales.   However, the market already appeared to take on board that the US economy is rebounding strongly in Q2 and that the prospects of a Fed hike have increased, but a June/July hike is still not a done deal.    The next important step...

The US dollar is little changed against the major currencies as yesterday’s moves are consolidated and traders wait for fresh developments.  Global equities were higher after Wall Street’s advance yesterday.  Asia-Pacific bond yields were firm, following the US lead, but European 10-year benchmark yields are lower, led by the continued rally in Greek bonds after an agreement was struck that will free up a tranche of aid. Source Dukascopy The relative stable capital markets are itself...

The Wall Street Journal is reporting that minutes of a meeting in China two months ago reveal that officials there have abandoned their commitment to give market forces greater sway in setting the yuan’s exchange rate.  Reportedly, in response to economists and banks request that officials stop resisting market pressure, one PBOC official explained that “the primary task is to maintain stability.”   The WSJ cites the minutes of the meeting and interviews with Chinese officials and...

The capital markets are off to a mixed start to start the last week of the month.  Asian shares were mostly higher, though the Nikkei shed 0.5%.  European shares are also higher, extending the three-week high seen last week.  FX Rates The US dollar is mixed.  The yen is the strongest of the majors.  The media continues to play up tension between the US and Japan at the weekend G7 meeting over the appropriateness of intervention, but Europe is not very sympathetic either.  Today’s...

The US dollar’s weakness in recent months, despite negative interest rates in Europe and Japan likely had many contributing factors.  These factors include shifting views of Fed policy, weaker US growth, the recovery in commodity prices, including oil, gold and iron ore, and market positioning.  A new phase began in late-April/early May.  The dramatic rally in iron prices reversed, and the Australian dollar, bottomed against the US dollar in mid-January, seemingly to anticipate the...