Investing

Activity increased during the Commitment of Traders reporting week ending 8 December.  There were four significant (10k+ contracts) gross currency adjustments by speculators.  Given that this period covers the second largest gain in the euro's history, it is surprising that...

The US dollar turned in a mixed performance in the week following the ECB's surprise and the healthy US jobs report.  In some ways, the greenback was like a fulcrum, not the driver.  The dollar-bloc currencies and the Norwegian krona...

Anglo American, one of the largest mining companies in the world, has announced a restructure that will cut 85,000 jobs worldwide, a reduction of its workforce by almost two-thirds. The move follows a huge downturn in commodities prices, which have...

The cat is finally out of the bag. The IMF has confirmed that the Chinese yuan will be included in the Special Drawing Rights (SDR) basket of reserve currencies. It was only a matter of time until the IMF acted...

China’s instructions from the IMF were that, as an operational requirement for joining the SDR, the gap between the onshore and offshore yuan (CNY and CNH respectively) needs to close.  This was important for central banks to hedge.  The opposite...

This remains one of my favorite Great Graphics that illustrate the divergence theme that I think is the main driver of the euro-dollar exchange rate.  Composed on Bloomberg, it shows two time series.  The first (white line) shows the German...

The market's disappointment with the ECB unleashed pent-up corrective forces in the foreign exchange market.  This leg up in the dollar began in mid-October.  Through the day before the ECB, the euro was the weakest of the major currencies, losing...

Adding the renminbi in the IMF’s basket is the first step in opening up the world’s elite reserve currencies to emerging economies. Currently, the International Monetary Fund’s (IMF’s) basket of major reserve currencies has only four members: the US dollar,...

It is official.  The Chinese yuan will be in the SDR.  At a 10.4% share, it is a bit more than I expected, but less than the 14%-16% share that the IMF staff has intimated a few months ago.  This...

Recently, the International Monetary Fund's staff and its chief Christine Lagarde suggested that the yuan should join the basket of international reserve currencies (the Special Drawing Rights, or SDR). Expected approval of the inclusion is likely to come at the...

This Great Graphic was composed on Bloomberg.  It shows two time series.  The yellow line shows the premium the US pays over Germany for two-year money.  The white line shows the premium the US pays over Japan for two-year money. ...

The US dollar recorded its high for the year against the Swiss franc on January 14 near CHF1.0240.  It closed that day a little below CHF1.0190.  The next day the Swiss National Bank surprised the world by lifting its cap...

On 13 November 2015, the IMF’s Managing Director, Christine Lagarde, released a statement that an IMF Executive Board meeting will come on 30 November to decide whether to include the Chinese reminbi (RMB) in the Special Drawing Rights’ (SDR) valuation...

The Canadian dollar is more than a petro currency.  It is also subject to the same forces of divergence that have lifted the US dollar more broadly.  Since the beginning of the year, the US two-year yield has risen 26...

The continued build of short currency futures positions characterizes the changes in the speculative positioning.  All the currency futures we track saw an increase in gross short positions. This is what drove the large net short positions.  One thing this...