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Tag Archives: CAD

Great Graphic: USD Pushes Below CAD1.30

For the first time since mid-June, the US dollar has traded below CAD1.30.  The greenback is weaker against all the major currencies.  However, for the most part, it is still in well-worn ranges, which makes the breakdown against the Canadian dollar even more notable.  It is not clear that today's break will be sustained.  Indeed, we lean against it.  However, a bounce back into the CAD1.3040-CAD1.3060 may offer a better selling opportunity.   As the Great Graphic here...

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Equities, Bonds, and the Dollar Start Week Softer

The week's big events lie ahead.  It is seen as the last important week before the dog days of summer when many participants will take holidays.  The BOJ's two-day meeting concludes tomorrow.  Speculation that the BOJ is looking for ways to tweak its program continues to spur a small taper-lite tantrum in Tokyo.   For the third session within a week, the BOJ defend the cap on the 10-year bond under its Yield Curve Control policy.  And for the second of thee operations,...

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Greenback Outlook: More of the Same?

A week ago, fear of a currency and trade war were fanned by comments by US President Trump.  Trump's comments about the EU and China manipulating their currencies were largely ignored except by short-term foreign exchange traders and the press.   An escalation of trade tensions eased when Europe agreed to do what it was doing (buying US soy) and wanted to do (import more liquified natural gas) and the US agreed to put freeze the imposition of tariffs on Europe, like...

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Greenback Remains Firm Ahead of Q2 GDP

The US dollar is trading firmly in Europe after consolidating yesterday's gains during the Asian session and ahead of the first look at Q2 GDP.  Yesterday's economic reports, including durable goods orders and inventory data, saw the Atlanta Fed's GDPNow tracker lower its forecast to 3.8% from 4.5%.  Most market surveys likely do not incorporate the impact of yesterday's reports, suggesting some downside risk.The White House has been playing up a strong report, though in...

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US as Revisionist Power Remains Biggest Risk for Investors

A new front opened in the effort by the Trump Administration to re-orient the global political economy.  Trade actions, including the claim that steel and aluminum from Canada, Europe, and Japan are threats to US national security,  have been coupled now with an attack on EU commercial practices (allowing the Nord Stream II gas pipeline from Russia while the US is trying to sell more energy to Europe) and a shot across the bow about alleged currency practices.  Ahead of...

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Dollar Consolidates after Trump Wades In

The US dollar is little changed but mostly softer as the week draws to a close.   The market is digesting the implications of yesterday's comments by President Trump about interest rates and foreign exchange, and without fresh economic data, are content to go into the weekend.   President Trump's explicit displeasure with the Fed's rate hikes sucked the wind from the dollar's sails yesterday.  The greenback extended this week's gains to probe above JPY113 for the first...

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Greenback Extends Gains

The US dollar is extending its recent gains against most of the world's currencies.   We continue to see the most compelling case for the macro driver being the diverging policy mixes.  There are also more immediate factors too.  The surprisingly poor UK retail sales report, for example, managed to do what the Brexit chaos and softer than expected CPI fail to do.  Namely, push sterling below $1.30 for the first time since last September. Sterling fell about $1.2985.  The...

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Greenback Extends Gains–For Now

After softening in Europe yesterday, the dollar recovered in the North American session with the help of assurances by Fed Chair Powell who reaffirmed the path gradual path despite clear recognition that tariffs threaten wages and growth.  The greenback has extended those gains today and is higher against all the emerging market currencies, expected the Turkish lira, which is slightly firmer. In the emerging market space, the South Korean won is the weakest, off nearly...

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Great Graphic: Two-year Rate Differentials

Given that some of the retail sales that were expected in June were actually booked in May is unlikely to lead to a large revision of expectations for Q2 US GDP, the first estimate of which is due in 11 days.  Before the data, the Atlanta Fed's GDPNow projects the world's biggest economy expanded at an annualized pace of 3.9% in Q2.  If true, it would be the strongest quarterly expansion since Q3 14, when the economy grew 5.2% after a 4.6% pace in Q2 14.  The St. Louis and...

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Dollar Softens a Little as Market Awaits Developments

The US dollar is slightly softer against most of the major currencies but is in narrow ranges ahead of today's key events, which include US retail sales and the debate in the UK parliament over Brexit.  The yen is the main exception.  The local markets are closed for a public holiday, and the yen did initially strengthen (the dollar eased to ~JPY112.10) but surrendered those gains and consolidating its biggest loss last week in 10 months.   The UK's internal Brexit...

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