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Tag Archives: EUR

Rates Still Key to Dollar’s Outlook

The US dollar rose against the major currencies last week, except the Australian and Canadian dollars, which remained resilient in the face of higher US rates and weaker Chinese imports.  Some attribute the Aussie and Loonie's gains to the fourth consecutive weekly gain in oil and the CRB Index. The US 10-year yield rose for its second consecutive week.  It has from 1.54% at the end of September to 1.80% in the middle of last week before consolidating for the past two...

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Firm Dollar Consolidating, Awaiting US Retail Sales

The US dollar is firm against most of the major currencies, but within yesterday's ranges, which seems somewhat fitting amid the light new stream.  The high-yielding Australian and New Zealand dollars are resisting the stronger greenback, while on the week the Aussie and the Canadian dollar are the only majors to gain.   After recovering from $1.2130 to $1.2270, sterling ran out of steam.     Near $1.22, it is off about 1.8% this week after last week's 4.2% drop.  It fell...

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Dollar Edges Higher, though US Rates Soften

The US dollar is firm, and the euro has slipped below $1.10 for the first time since late-July.   Although the dollar's gains against nearly all the major and emerging market currencies are being attributed to the FOMC minutes, which underscored ideas that another hike was drawing near, US interest rates are a lower today.  Both the two and 10-year yields yesterday rose to their highest levels in four months (87 bp and 1.80% respectively).  Both are now 2-3 bp lower.  ...

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May Concedes to Parliament, Sterling Rises after Pounding

News that UK Prime Minister May has accepted that Parliament should vote on her plan for exiting the EU stopped sterling's headlong slide.  Sterling had been pounded for roughly 8.5 cents since the start of the month including the last four sessions.   The idea that parliament, where the Conservatives enjoy a slim majority, is less enthusiastic about Brexit may mean a less acrimonious divorce.  Sterling advanced sharply, like the flash crash at the end of last week, took...

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Great Graphic: Euro is Approaching Year-Long Uptrend

This Great Graphic, composed on Bloomberg shows the euro against the dollar since the start of the year.  It shows the trendline drawn off the early-January and late-June lows.  It catches the last July low.  It is found today near $1.1035, just below the August low (~$1.1046).  Technical indicators, like the MACDs and Slow Stochastics, seem to favor a downside break.  However, there is congestion around $1.10.  The July low was seen near $1.0950 and the Brexit spike low...

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The Dollar Remains Bid

The US dollar is bid against all the major and most emerging market curerncies.  An important driver is the backing up of US rates.  The two-year yield, which is particularly sensitive to Fed policy is at it highest levbel since early June (~86 bp).  The US 10-year yield is five basis points hihger today at 1.77%, which is the highest in four months.  In comparison Europe's two-year yields are mostly lower today.  Germany's two-year yield is minus 68 bp and Japan's stands...

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Dollar Firm, but Canadian Dollar and Mexican Peso Respond Favorably to US Politics

The US dollar has started the new week on a firm note. The light news stream and holidays in Japan, Canada and the United States make for a subdued session.  Notable exceptions to the dollar's gains are the Canadian dollar and Mexican peso.  Both currencies appear to have been. underpinned by US political developments, the main feature of which is the implosion of the Trump campaign.  Many Republican officials retracting their support and a smaller number are calling for...

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The Week Ahead: It’s Not about the Data

High frequency economic reports will be not be among the key drivers of the capital markets in the week ahead. The light schedule, consisting mostly of industrial production in Europe, inflation for Scandinavia, and US retail sales, will have minimal impact on rate expectations.   A November rate Fed move was never very likely.  The September employment report needed to be amazingly strong to boost the chances, and it was not.  To overcome tradition, and the logistical...

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US Jobs Data Disappoints, but Still Strong Enough to Keep Risks of a Dec Move on Rates

The US grew 156k jobs in August, missing the median estimate by about 16k.  The July series was revised up by 16k.  The unemployment and participate rate ticked up 0.1% to 5.0% and 62.9% respectively.    Hourly earnings rose 0.2% to lift the year-over-year rate to 2.6% from 2.4%.  The average work week increased to 34.4  hours from 34.3.   As we noted the initial estimate in September has typically disappointed since the financial crisis.  However, we had thought this...

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Sterling Stabilizes After Harrowing Drop, Now Jobs

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