Tuesday , November 12 2019
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Tag Archives: EUR

Greenback Proves Resilient

The US dollar traded heavily in the first few days of last week as investors continued to respond to the poor employment report.   However, Yellen's willingness to defer judgment while noting the underlying economic strength, JOLTS and the initial jobless claims, coupled with the ongoing anxiety over the June 23 UK referendum helped the dollar recover in the second half of the week.   Although four central banks meet and there are numerous economic reports, there are two...

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Dollar Retains Firm Tone, but Yen and Swiss Franc maybe Drawing Support from Brexit Fears

The US dollar weakened in the first half of the week as participants continued to react to the shockingly poor jobs report and shift in Fed expectations.  However, it recovered smartly yesterday and is seeing some modest follow through buying today.   The main exceptions today are the Japanese yen and Swiss franc, the only major currencies besting the dollar today.  For the week, it is the dollar-bloc and franc that have maintained weekly gains.    And those dollar-bloc...

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Greenback is Mostly Firmer, but Yen is Firmer Still

The US dollar is posting modest upticks against most of the European currencies and the Canadian and Australian dollars. However, it has fallen against the yen and taken out the recent low, leaving little between it and the May 3 low near JPY105.50.  The New Zealand dollar though is the strongest of the major currencies; gaining 1.5% following the RBNZ's decision to leave rates on hold, and signal of little urgency to cut again in the near-term.   In recent days, the odds...

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Cool Video: Bloomberg Television–All about the Periphery

I am in Boston to attend the Fixed Income Leaders Summit and was invited to join Alix Steel, Joe Weisenthal, and Scarlet Fu on Bloomberg TV.   We talked about the peripheral in Europe, especially Portugal, Italy and Spain.   Each has a pressing issue.  In Portugal, yields have not fallen as much as in other peripheral countries.  In Italy, they are belatedly addressing the recapitalization of Italian banks, but by the end of next week the bank-financed backstop that is...

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Currencies Broadly Stable, but Greenback is Vulnerable

The foreign exchange market is quiet.  The euro remains confined to the narrow range seen on Monday between $1.1325 and $1.1395.  We continue to look for higher levels near-term as the drop from May 3 (~$1.1615) to May 30 (just below $1.11) is corrected.  A move above $1.1420 would likely spur more buying.   The dollar has surrendered yesterday's gains against the yen that had lifted it to almost JPY108.00.  The pullback has been limited to the JPY106.75 area.  The...

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Swiss Reserves: Not what They Seem

News that Switzerland's reserves rose to a new record high of CHF602.1 bln in May from CHF587.9 bln in April spurred talk that the SNB has been intervening covertly.  One media account cited a trader calling the intervention as  "massive."  We are skeptical.  Given the massive holdings of foreign currencies, we suspect that the swing in valuation likely accounts for an apparent increase in reserves.   The reserves are reported in Swiss franc, which fell against both...

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FAQ: ECB’s Corporate Bond Buying Program Starts

In March, the ECB decided to increase its asset purchases from 60 to 80 bln euros a month and to include corporate bonds.  The corporate bond buying program begins this week.   We use an FAQ format to discuss the key issues. What is the ECB doing?   The ECB will buy euro-denominated, investment grade bonds from companies incorporated within the eurozone.  What is the duration of the corporate bonds that the ECB will buy?  The ECB will purchase bonds that mature in...

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Shallow Bounce in Dollar, though Sterling Pressured by Brexit Polls

After the shellacking it took after the shockingly poor jobs data, the US dollar has only managed a shallow recovery against the euro and yen.  The euro peaked near $1.1375 before the weekend.  The mild pullback to almost $1.1335 drew some fresh buying.   The dollar made a marginal new low just below JPY106.40 in early Asia.  It ticks to nearly JPY107.30 in late Asian turnover as the Nikkei climbed back after gapping lower and closed at session highs.  The greenback...

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Dollar’s Rally Ends with a Bang, Look Out Below

The US dollar reversed higher on May 3 and trended higher.  It peaked on May 30, but it was not clear until the poor US jobs report sent the greenback reeling on June 3.  The fact that May 3-May 30 move is over is the most important technical consideration for the dollar's outlook.  It is interesting to recall that the dollar had bottomed a fortnight before the FOMC minutes and Fed comments had encouraged the market to re-price a summer hike. The dollar now has peaked prior to investors...

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Greenback Mostly Softer Ahead of ECB and ADP

The US dollar remains under pressure.  It is off for the third day against the yen and slipped below JPY109 for the first time in a little more than two weeks.  The Nikkei struggled to cope with the foreign exchange developments, lost 2.3%, the most in a month, after gapping lower.  At JPY108.50, the dollar would have given back 50% of its rally off the May 3 low near JPY105.50.   Below there, the JPY107.80 is the 61.8% retracement.   The euro is north of $1.12 after having briefly...

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