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Tag Archives: CAD

Brexit Optimism Underpins Sterling

The US dollar is mostly firmer, while global equities are softer and bonds little changed.  The Turkish lira and South African rand remain under pressures.  However, there does not appear to be an overall theme in today's markets.   Disappointing data from Australia and New Zealand has seen the Antipodean currencies move lower.  New Zealand's business confidence fell to a ten-year low, and this sent the Kiwi tumbling.  Its nearly 0.9% fall leads the majors.  It is...

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Dollar Finds Support, but Downside Correction May Not be Over

The US dollar has steadied after pulling back in recent days, but the downside correction does not appear complete, and month-end flows are still a risk to picking a dollar-bottom.  The Australian dollar is the weakest of the majors.  The main drag is paradoxically Westpac, one of  Australia's largest banks, raised the variable rate mortgage by 14 bp to 5.38%.  Others are expected to follow.  The reasons the Aussie was sold on the news was that it makes an RBA hike less...

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Greenback Remains On Defensive

Corrective forces continue to weigh on the US dollar.  Sometimes the narratives drive the price action and sometimes the price action drives the narratives.  Currently the latter appears to hold sway. The dollar's downside correction began around the middle of the month, well before Powell's August 24 Jackson Hole speech.  The Fed funds futures do not reflect the dovish spin many wanted to see in Powell to explain the dollar's slide.  In fact, the odds of a September and...

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A Dog Day of Summer

Last week's dollar losses were initially extended in Asia before it came back bid.  The euro briefly poked through $1.1650 for the first time in three weeks.  However, the gains were sold into, and the euro finished the Asian session near $1.16, where there is a 782 mln euro option expiring, and  2.4 bln euros struck at $1.1625.  Even the first gain in the German IFO in nine months failed to recover its traction in the European morning.   The rise in the assessment of...

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Dollar’s Correction may have More Room to Run

As the US dollar appeared to break higher, we noted that it was overextended.  Against most of the major currencies, it was beyond its Bollinger Bands, set at two standard deviations around the 20-day moving average.  The correction that began mid-August does not appear over, implying a heavier technical bias for the dollar in the days ahead. It looks as if the first part of the dollar's downside correction is complete and now the second leg lower appears to have begun. ...

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Greenback Marks Time Ahead of Powell

The US dollar is paring some of yesterday's gains in quiet turnover ahead of Fed Chief Powell's speech at Jackson Hole, the week's last highlight.  The euro and sterling are trading inside yesterday's ranges, which the dollar has extended its gains against the yen to reach a two-week high near JPY111.50.   News of a new Prime Minister in Australia has lifted some of the political uncertainty down under, and the Australian dollar has recouped about a third of yesterday's...

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Trump Comments Hit Dollar, Little Impact on Rates

The US dollar is broadly lower following President Trump's comments yesterday, criticising Fed policy and reiterating his previously made claim that China and the EU are manipulating their currencies.   We suggested that last week's presidential tweet that identified strong capital inflows into the US may not have been written by President Trump.  The qualification of a superlative was not his style.  Trump did not talk the dollar down on Monday as much as criticize the...

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Greenback’s Momentum Stalls

A week ago we were concerned that the dollar's surge had left it over-extended from a technical perspective and most of the major pairs, but the yen and Canadian dollar were outside their Bollinger Bands.  We cautioned against chasing it, but the dollar's surge continued.  It peaked in the middle of the week and stalled.  We look for a consolidative/corrective phase in the coming days that will entail a weaker dollar.   The  Dollar Index lost a bit more than 0.5% ahead...

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Dollar Limps into the Weekend

The US dollar is trading heavily against most of the world's currencies today.  The main exceptions come from the emerging markets where the Turkish lira, Russian ruble, and Mexican peso are the chief exceptions, and their losses are modest.  This week's dollar gains are being pared in largely corrective activity and amid a light news stream.  The threat of more sanctions on Turkey if it does not release the American pastor is helping the dollar recoup yesterday's losses...

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Emerging Markets Stabilize, Dollar Eases a Little

Two developments have helped turned sentiment, or at least arrested the markets' momentum.  First, the developments in Turkey, where officials have taken a few measures that will make it somewhat more difficult to access the lira.  This may have an unintended consequence of also making it more difficult for foreign investors to buy Turkey's bonds at auctions, for example, not that this is an imminent challenge.  It is also true that the dramatic depreciation of the lira and...

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