Category: Economics

Searching for Dollar-strength Follow Through


The key issue facing the foreign exchange market is whether the modicum of strength the US dollar demonstrated last week is the beginning of a sustainable move.  It is possible that the market is again at a juncture in which the price action will drive the narrative rather than the other way around.  A move above JPY108 and a decline in the euro below $1.1350 signal a start to a broader dollar recovery that may have begun last week with impressive gains against the dollar-bloc.

Is This What a Dollar Bottom Looks Like?


The US dollar rose against all the major currencies last week. The importance of the price action does not lie with the magnitude or the breadth of the advance. Instead, the two takeaway technical observations are 1) the seemingly one-way market for euro and yen ended and 2) the dollar-bloc currencies appear to have put in at least a medium-term top.

World Bank: Fresh Water Scarcity could Shrink Global Economy


On Tuesday, the World Bank reported that fresh water scarcity could be the biggest problem facing the economies of the world. Economies across large portions of the planet could shrink dramatically by 2050 as climate change causes fresh water scarcity issues.

A few regions may suffer particularly badly. One standout is the Middle East, where gross domestic products (GDP) could slip by as much as 14% unless the region comes up with ways to significantly reallocate the supply of fresh water.

The Southeast Asia IS Threat Looms Large


Terrorism is not a new phenomenon in Southeast Asia, but goes as far back as the era of anti-colonial struggle. It gathered pace after September 11 with a series of attacks perpetrated mostly by the Al-Qaeda linked organisation Jemaah Islamiyah. Terrorism continues to pose a threat to Southeast Asian societies, as demonstrated by the recent attacks in Jakarta and the southern Philippines by groups inspired by the so-called Islamic State (IS).

The threat from IS to Southeast Asia takes three forms.

Intrafirm Trade and the Complex Supply Chain


This Great Graphic was posted by Eric Nelson, the managing editor of the Chamber of Commerce’s Above the Fold Publication. It shows many of the different components of the 737 single-aisle airplane and where they are sourced.

A Busy End of the Week Leads with a Firmer Dollar


The US dollar is firm, near the best levels of the week against the euro, yen, and sterling. However, against the dollar-bloc and several actively traded emerging market currencies, including the Turkish lira and South African rand, the greenback has given back some of yesterday’s gains. 

The U.S. May Get Trumped


This Great Graphic is a 90-day history of the “betting” at PredictIt that Trump becomes the new US President.  With Cruz suspending his campaign, the odds of Trump have risen just above 40%. 

The US national interests and challenges to those interests do not change much from year-to-year, and this may help explain the continuity in US foreign policy (including foreign economic policy).  Trump’s campaign style emphasized a break from the conventional approach.

IMF Says Global Economic Growth Powered by Asia


Many may think that the United States or Europe, as the location of most of the world’s most developed nations, would be driving global economic growth. Asia, however, is actually the area driving global economic growth this year, according to the International Monetary Fund (IMF).

Was Indiana Good for the Dollar?


Has the dollar turned now that Cruz dropped out of the Republican primary and Trump has secured the nomination?  The greenback has extended yesterday’s reversal higher. The euro had briefly poked through $1.16 and closed on its lows a little below $1.15. Sterling peaked above near $1.4770 and finished near$1.4535 for a potential key reversal.  Despite weakness in US stocks and a sharp drop in US yields, two usual props for the yen, the dollar recovered from JPY105.50 to over JPY106.50.

India’s Got Talent…for Japan


There is a popular saying among Indians that ‘Dubai is the best-run Indian city’. Hundreds of thousands of Indians, as well as others from the Indian subcontinent and Southeast Asia, have been making a living in the Gulf region through temporary contract labour.

They are mostly unskilled or semi-skilled workers engaged in the provisioning of a variety of services such as construction, retail, building maintenance and security, teaching, healthcare and domestic help.