Currencies

The unexpectedly record low increase in Q2 US Employment Cost Index unwound the some of the dollar's weekly gains and neutralized the near-term technical outlook.  Next week's nonfarm payrolls are still critical, and the weakness may put even greater burden...

From a technical perspective, the US dollar looked vulnerable to start the week, but the 8.5% drop in Chinese shares in Shanghai provided additional fuel.  The linkage between the two is that global headwinds may intensify and keep the Fed...

The overextended technical condition of the dollar we highlighted previously came with a mixed performance last week.  Against the top ten currencies, that dollar fell against five.  The drop in oil prices and other commodity prices encouraged rate cut expectations...

The US dollar rose against nearly all the major and emerging market currencies in the past week.  The notable exception among the majors is sterling, where hawkish BOE comments and another rise in average earnings goaded the bulls. Among the...

The Pacific developing member countries (DMCs) of the Asian Development Bank are a heterogeneous group of economies with different levels of economic development and economic size. However, when it comes to choosing an optimal exchange rate, the Pacific DMCs face...

The US dollar has begun the new week on firm footing. It remains, though, largely in the ranges seen in the second half of last week. Sterling is the notable exception.  Last week's sharp downside momentum has continued, pushing the...

The Peoples’ Bank of China (PBoC) has maintained a close relationship between the renminbi (RMB) and the US dollar since the RMB was first pegged in 1994. Twenty years on, after the PBoC has made the RMB somewhat more flexible,...

Sterling has fallen out of favor.  It was the market's darling, rallying from $1.4565 in mid-April to $1.5815 in mid-May.  From a technical point of view, it was correcting the slide from last July's test on $1.7200.  The fundamental trigger...

There are two separate but related developments lifting the euro to its best level in three-months against the US dollar.   First, the US economy is off to a disappointing start to Q2 after it appears to have contracted by around...

Tajikistan's government is struggling to prop up its currency amid downward fiscal pressure emanating from Russia. Dushanbe’s policies appear to be creating a black market for currency traders with potentially long-term repercussions for the ailing economy. Tajikistan's government is struggling...

The attention of financial markets often gets fixated on an index of measure and not on the effectiveness, purpose or the objective of the measure. The dollar index, in its current form, practically from 1973, is a classic case on...

At the end of each quarter, the IMF reports on currency reserve holdings by central banks for the preceding quarter. What investors are most interested in is the currency allocation of those reserves.  Not all central banks report the allocation...

It is precisely because the euro's decline is over-determined that the slide has accelerated.  It is not just that the ECB is buying sovereign bonds.  It is not just that the strength of the US labor market has persuaded more participants...

The controversial issue of “currency manipulation” has resurfaced. However, Washington and Beijing have very different perceptions about the identity of the “currency manipulator.” The controversial issue of “currency manipulation” has resurfaced. However, Washington and Beijing have very different perceptions about...

America’s two political parties rarely agree, but one thing that unites them is their anger about ‘currency manipulation’, especially by China. Perhaps spurred by the recent appreciation of the dollar and the first signs that it is eroding net exports,...