Posts tagged 'Dollar'

Does Pimco know something we don’t?

On Sunday Pimco issued an intriguing tweet from Bill Gross, the undisputed King of the bond mountain.

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Default denial and the dollar

This was Paul Krugman’s guess about what a debt-ceiling fueled government shutdown could lead to:

I’m not at all sure that we’re looking at an interest rate spike; maybe even the opposite. But for sure we should be looking at a plunging dollar, and probably carnage in the stock market too.

Courtesy of Deutsche Bank, here’s the latest change in net dollar futures positioning as of last week: Read more

One very large divergence please (with a dollar chaser)

According to Nomura, since 1980, there are only two periods of economic divergence — between the US and Europe and the UK — comparable to what we are observing currently.

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Too much appreciation too soon for the renminbi?

Thanks to Monument Securities’ Marc Ostwald for directing our attention to an interesting report from MNI on Tuesday regarding changing attitudes to the renminbi:

The PBOC made a “big mistake” in letting the yuan rise so quickly earlier this year because it has only swelled the level of foreign exchange onshore, creating potential problems when depreciation expectations rise and capital starts flowing out of the country, regulators contendRead more

QE down under

Another day, another Aussie GDP downgrade.

From BofA Merrill Lynch: Read more

Don’t mention the R word

That’s recession and the merest hint of the word sends Australian policymakers in to paroxysms of anger.

For example, here’s David Gruen (the Treasury’s chief macroeconomist) speaking before a Senate hearing last week.

From the Sydney Morning HeraldRead more

The Aussie dollar – from south pacific peso to southern Swiss franc and back again

The pain goes on for the currency dubbed until recently the southern Swiss Franc

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Down, down, deeper and down

We are, of course, talking about the Australian dollar — now going head to head with the Syrian pound for the title of the world’s worst performing currency.

The latest drop follows a call from Pimco of even lower interest rates. Read more

A dollar bully

Dear everyone, this article is based on a questionable premise: that the dollar is about to head off on another bull run. We know this may not happen. Thanks, us. Read more

Ware the currency wars

You gotta roll with fashion:

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Bye, bye RoRo

For US dollar pairs at least…

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Gawd but the currency wars are boring

There’s basically nothing happening. Sure we’ve got plenty of rhetoric, a Swiss franc floor and QE — but FX volatility is touching recent lows:

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A tinhat-full of dollars

This is just a lovely chart from the FX team at HSBC (click in to see — tis just too big for an excerpt to handle):

What it, and its fellow soon to be introduced below, do is call further into question the US dollar’s status as a haven currency; one which will benefit in periods of risk aversion. They do so by looking at the performance of G10 currencies against the S&P500. It’s a timely query considering the approaching fiscal cliff… and, well, lots of other stuff. Read more

Cofer catch-up time

The glacial pace of FX reserve change continues, as documented by the IMF ’s “Composition of Official Foreign Exchange Reserves” data which was released on Friday.

Summary: the dollar is still reluctantly loved, the euro is ‘confused’ by the Swiss and everyone is as deep into the ‘others’ as they can be… which isn’t far. Read more

It’s the FDI, stupid

When commentators cast around for reasons to explain the strength of the Australian dollar in the face of falling iron ore and coal prices they all arrive at the same answer - haven bond buying by central banks/ sovereign wealth funds. In fact, we’ve also made that very point.

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Reserve managers caught between a euro and a dollar place

The pace of reserve accumulation may have been slowing over the past few years — although that also reflects  movements in the value of currencies within the portfolios, particularly the dollar — but there are good reasons to suggest it may be picking up again:

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The euro’s paradox

With apologies to Russell: a stronger euro may well sit within the set of things that weaken the euro.

Or, to put it even more circularly, if the single currency gets stronger, then the eurozone’s economic recovery gets harder — and thus the measures that are taken, ostensibly, to shore the euro up run the risk of doing it damage by undermining its longer-term existence. Read more

A currency war campaign plan for the BoJ

(Chart from RBC Capital Markets.) Read more

Currency wars redux

QE3 has set the dogs of FX verbal intervention loose (well, looser anyway) and it seems probable some actual shots may be fired in the coming while.

Bank of New York Mellon’s alliterative Neil Mellor pointed to Brazil, where the central bank was the first to pass comment on the Fed’s move (with our emphasis): Read more

Fortescue and the Wile E. Coyote moment for the A$

And so Fortescue Metals Group, poster child for the Australian resources boom, has bowed to the inevitable and scaled back its heroic expansion plan.

Or as the heavily indebted company prefers to spin it; Takes decisive action on iron ore market volatility. Read more

The Aussie dollar – from South Pacific peso to Southern franc

It can’t be much fun being an Australian in London at the moment. (Trailing the Brits is one thing, but lagging the Kiwis in the medal table must really hurt.)

But at least our antipodean visitors can afford to indulge in a little retail therapy at Westfield Stratford City (the Australian dollar is trading close to a record high against the British pound) or, if they are really embarrassed, hop on the Eurostar to Paris (where the dollar hit a record high against the eurothingy just last week). Read more

China’s foreign debt keeps rising

ChinaScope reports that China’s total outstanding foreign debt was $751.26bn at the end of March 2012, according to data released Monday by the State Administration of Foreign Exchange (SAFE).

Here’s the trend to date, also courtesy of ChinaScope: Read more

Dollar stats du jour

From Rabobank’s weekly dive into FX market positioning courtesy of the CFTC’s latest commitment of traders report:

USD longs have jumped to their highest levels not only for the year but since before our records started in 1999 as safe haven demand builds on the back of the EMU crisis and wider concerns regarding the global growth outlook. Read more

PBOC, not leaning against the wind anymore

First, in a sign that Chinese woes are definitely rising and that authorities are now sufficiently concerned, we bring you news that China cut rates on Thursday (via Bloomberg):

China cut interest rates for the first time since 2008, stepping up efforts to combat a deepening economic slowdown as Europe’s worsening debt crisis threatens global growth. The one-year deposit rate will drop to 3.25 percent from 3.5 percent effective tomorrow, the People’s Bank of China said on its website today. The one-year lending rate will fall to 6.31 percent from 6.56 percent. Banks can offer a 20 percent discount to the benchmark lending rate, the PBOC said, widening from a previous 10 percent. Read more

Yen falls to seven-month low against dollar

Bank of Japan easing policy has sent the yen to lowest level against the dollar since July, with the spread between two-year US Treasuries and Japanese debt widening the most since August, says Bloomberg. The yen has lost 3.7 per cent since the BoJ unveiled a one per cent inflation target on February 14. UBS reckons the BoJ’s shift could see the yen at ¥85 by the end of year, although the yen could return to its 2011 rally if Japan resumes posting a trade surplus in 2012, according to the WSJ.

The currency pair league table

$/€ races ahead of $/£, $/¥ and $/SFr, but $/AUD has made a strong run from behind…

Actually, the thing that jumps out from Table 4 of the most recent FX trading survey from London’s Foreign Exchange Joint Standing Committee is that none of the columns — April 2011 thru October 2011 — are ranked consecutively. (Click to enlarge) Read more

Goldman’s € forecast: down and up

That’s a facetious title, for sure — but also broadly accurate.

Thomas Stolper and team at G Sachs have adopted a new quantitative two-stage model for mapping their macro views on to the likely possible course of the $ vs the €. The upshot: Read more

A fistful of ______

Iranian FX management — still as bonkers as ever:

TEHRAN, Jan 10 (Reuters) – Iran’s currency has slid 20 percent against the dollar in the last week despite central bank intervention, and Iranians concerned about the economy said on Tuesday attempts to send text messages using the word “dollar” appeared to be blocked. Read more

Euro crisis, Brent oil edition

Courtesy of Olivier Jakob at Petromatrix, FT Alphaville presents the price of front-month Brent oil futures expressed in euro terms:

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Euro rout

Brutal:

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