Wednesday , September 23 2020
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Tag Archives: $TLT

The Charts: Ugly Equities and a Range Bound Dollar

The major central banks have met, and not one felt it incumbent upon them to take fresh policy action.  Despite some dramatic intraday swings and close scrutiny, the euro-dollar exchange rate continues to be mainly in a $1.17-$1.19 trading range that has dominated since the end of July.  All the brouhaha about the rapid rise of the euro misses that it has been moving sideways for nearly two months.  With all the attention commentary on the euro, it was the yen, whose 1.6% gain last week,...

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Dollar’s Bounce: Nearly Over?

Often, there seem to be one or two drivers of the foreign exchange market, but now there are several cross-currents.  Sterling's weakness is a phenomenon of its own making.  US-China tensions continue to run high as Washington has ratcheted up pressure on China and is insisting on the September 15 deadline for TikTok to change ownership or be banned.  Beijing would rather see it shuttered than sold.  The high-flying US NASDAQ has pulled back from the record highs set at the start of the...

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Dollar Sits on the Precipice

The dollar began last week with a drubbing.  The euro briefly pushed above $1.20, and the Australian dollar inched through $0.7400.  Sterling neared $1.35, and the greenback slipped below CAD1.30 for the first time since January.  However, profit-taking by momentum traders turned into a rout as some ECB officials seemed to push back, and the greenback ended on a firm tone.   Although equities continued to rise for a day or so after the dollar bottomed, broad corrective forces were...

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A Look at the Price Action

The idea that the Federal Reserve would tolerate higher inflation to compensate for the undershoot would on its face be dollar negative. Make no mistake about it. After a wobble, the dollar fell. It recorded new lows for the year against the British pound, Australian dollar, and Swedish krona ahead of the weekend. New lows for the month recorded against the Canadian dollar and Norwegian krone. The euro and yen flirted with the edges but remained within their well-worn ranges. ...

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Upside Break in Currencies Foiled By Cautious Fed and Stronger PMI

The dollar fell to new lows against the euro, sterling, the Australian dollar, and the Swedish krona last week.  However, it was a head fake and the greenback quickly returned to its previous ranges.  The combination of the July FOMC minutes that dampened expectations for new initiatives, such as yield curve control or an increase in asset purchases and disappointing preliminary August PMI readings tempered investor enthusiasm for risk.  Since the lower end of the dollar's range was...

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Will Sideways Movement Alleviate the Overextended Greenback?

Gold sold off, and US yields rose as we anticipated, but this did little for the greenback, which fell against all the majors but the Japanese yen and New Zealand dollar.   Although the US dollar fell to new six-month lows against the Canadian dollar and rose to three-week highs against the yen, it remained mostly range-bound.  The sideways movement is correcting the overextended momentum indicators. What looked like double tops in several of the foreign currencies last week,...

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About that Dollar Bounce

The US dollar did not recover as much ahead of the jobs as we flagged a week ago, and the technical condition is still stretched.  The price action lends credence to our view that a technical consolidative/corrective phase is at hand. Further near-term dollar recovery looks likely but does not change our longer-term bearish outlook. Dollar Index:  A bottom was carved and tested near 92.50.  It is potentially a double bottom.  A move above 94.00 is needed to confirm it, though others...

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After Being Shellacked in July, the Dollar is Poised to Correct Higher Ahead of Jobs Data

The dollar was beaten up in July.  It fell against nearly all the world's currencies except for a handful of emerging market currencies, including the Argentine peso and Turkish lira.  It did not just fall against the major currencies, but it fell hard.  The euro's 5.0% gain in July was its best monthly performance since September 2010.  Sterling's nearly 5.6% gain was the most since May 2009.  Gold, often seen as the un-dollar, surged by over 10% to a record high.  It had rallied...

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Dollar Momentum

The US dollar fell against all the major currencies last week and reached the lowest level against the euro since October 2018.  The five-week slump in the Dollar Index is the longest since late 2017/early 2018.  Although we were early dollar bears, the downside momentum appears stronger than the momentum indicators suggested last week.  Even shallow dollar bounces have been sold. By and large, as we will see below, the momentum indicators continue to suggest a consolidative or...

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Most US Bond Sectors Continue To Post Solid Gains In 2020

Year-to-date gains still dominate the US fixed-income landscape for year-to-date results. Except for junk bonds, the rest of the American bond realm is enjoying a bull run in 2020 through yesterday’s close (July 21), based on a set of exchange-traded funds. The top performer: long-dated Treasuries. The iShares 20+ Year Treasury Bond (TLT) is up a sizzling 24.5% this year. Note, however, that most of the gain was generated in the first four months of 2020. Since then, TLT has...

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