Currencies

18 July 2016

Other Currencies Matter

The US dollar is easily the most traded currency, and despite the plethora of other currencies, it is on one side of nearly 90% of all trades.  Yet the movement in the foreign exchange market presently is not so much...

14 July 2016

When is a Bottom a Bottom?

With the Bank of England apparently surprising the market more than one might have expected, given the split surveys, many are thinking sterling has bottomed.  If it has bottomed, where could it go?  A number of technical considerations suggest toward...

7 July 2016

Is the Yuan Really Weak?

Here are two Great Graphics that portray two time series: the dollar-yuan exchange rate and the yuan against a trade-weighted basket.  The first chart comes from a highly reputable consulting firm. It replicates the trade-weighted basket that Chinese officials unveiled...

26 June 2016

Foreign Exchange Market Technical Condition Changes

The dramatic reaction to the UK decision to leave the European Union has changed the technical condition in the foreign exchange market.  While the precipitating factor is a fundamental political development, it is mediated by psychology.  Group psychology is the...

20 June 2016

Are We at Peak Pound Yet?

Sterling is recording its daily advance since 2008 today.  It is up about 2.3%.  The ostensible driver is the weekend polls suggesting that, as we suspected the murder of the UK MP acting as a catalyst of sorts for public...

20 June 2016

Technically Speaking: Could We See a Shaky Dollar?

The US dollar recovered from the sell-off sparked by the poor employment data released on June 3. It continued to move higher after the Federal Reserve met and shaved its forecasts for the next year and 2018.  The number of...

15 June 2016

Is Singling Out the Yuan as Manipulated Fair?

We have a lot of power with China. We can’t continue to allow China to rape our country, and that’s what they’re doing. – Donald Trump, May 1, Fort Wayne, Indiana We have a lot of power with China. We can’t...

14 June 2016

U.S. Treasury Department Lays Down the Currency Law

For over a quarter-century now, the US Treasury Department has released a formulaic report on the currency policy and practices of key economies on a semi-annual basis. On occasion, it has hauled up a trading partner as a ‘currency manipulator’...

7 June 2016

Collateral Currency Damage from Poorly Timed Rate Hikes

Renewed allegations of “currency manipulation” in the US-China bilateral agenda have less to do with the Chinese renminbi than US election politics and the Fed’s anticipated rate hikes. Even before the start of the eighth and final Strategic and Economic...

7 June 2016

Intervention or Valuation Change?

News that Switzerland's reserves rose to a new record high of CHF602.1 bln in May from CHF587.9 bln in April spurred talk that the SNB has been intervening covertly.  One media account cited one trader that terms the intervention as...

1 June 2016

Data, So Far Mixed, Confuses the Currency Picture

The US dollar is trading with a heavier bias to start the month of June.  Weaker stocks and firmer bonds has seen the yen rise the most, while sterling's losses have been extended after an ICM telephone survey showed a...

24 May 2016

So Much for a Market Forces-Based Yuan Exchange Rate

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.  The Wall Street Journal...