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Tag Archives: USD

USD Resilience in the Face of Aggressive Fed Easing Expectations

News that despite the disappointing jobs growth and weaker earnings growth, the engine of the US economy--consumers--remain resilient helped lift the dollar, which retraced most if not all of the previous week's losses.  The dollar rose against all the major and most of the emerging market currencies.  The Mexican peso was the best-performing currency, gaining almost 2.5% in the aftermath of an agreement that avoided US tariffs.   The back-and-forth of the dollar and an improved...

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Waning Risk Appetite Going into the Weekend

Overview:  Worries about an escalation in the Gulf following US accusations that Iran was behind yesterday's two attacks and weaker growth impulses, while trade tensions remain high, are dampening risk appetites ahead of the weekend.  Equities are lower.  Nearly all the stock markets in the Asia Pacific region fell today with Japan and Australia being the notable exceptions.  The MSCI Asia Pacific Index will take a three-day losing streak into next week.   Europe's Dow Jones Stoxx 600 is...

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Financial Statecraft or Whack-a-Mole

Overview: After roiling the markets by threatening escalating tariffs on Mexico, US President Trump has threatened China that if Xi does not meet him and return to the positions that the US claims it had previously, he will through on imposing tariffs to the remaining goods the US buys from China that have not already been penalized.  Yesterday as the euro, which the US President noted was undervalued, was approaching two-and-a-half month highs, he knocked it to its lowest level since...

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Anxiety Ticks Up, Risks Pared

Overview: The S&P 500 snapped a five-day advance yesterday and set the heavier tone for equities today.  Continued protests in Hong Kong were not shrugged off as they have been in the last couple of sessions.  The Hang Seng's nearly 1.9% decline was the largest in a month and led the region lower.  European shares are falling in sympathy, and the Dow Jones Stoxx 600 is off about 0.3% in late morning turnover.  US shares are trading lower in Europe, and the S&P 500 is about...

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Markets Take Another Small Step Away from the Edge

Overview:  The recovery in equities continues today in light news day.  Nearly all the bourses in the Asia Pacific region rose, led by a 2.6% gain of the Shanghai Composite.  The MSCI Asia Pacific Index rose for a third session. European equity benchmarks are rising for the sixth time in the past seven sessions.  The Dow Jones Stoxx 600 peaked a week before the S&P 500 (April 24 vs. May1) but has not retraced (61.8%) of its decline, though the S&P has surpassed a similar...

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Collective Sigh of Relief Lifts Equities, Yields, and the Dollar

Overview: A global sigh of relief that the US will not tariff all its imports from Mexico.  Equities are all higher, and the weekend demonstrations in Hong Kong over a bill allowing extraditions to the mainland for the first time did not deter investors from bidding up the Hang Seng over 2.3%, the most this year.  European equities are following suit.  The more modest 0.4% gain through the morning session is the fifth gain in the past six sessions.  US shares are trading higher and the...

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A Look at the Charts

The US dollar fell against all the major currencies last week, and the technical indicators warn the further losses are likely.  Market speculation that the Federal Reserve will be forced to cut rates more than once this year has strengthened.  It is outpacing the expectations that the ECB and BOJ will have to ease policy as well.  Canada's firmer data, including a surge in job creation, and Norway's shift to a less accommodative monetary stance, are notable exceptions.  The Bank of...

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US Policy Mix Flips and Will Take the Dollar with It

There is a new game, afoot.  For the last couple of years, it has been about normalizing policy.  Even the Bank of Japan, which has never declared it was tapering, has gradually reduced the amount of government bonds it purchases.  Countries like the US, or Canada in 2017, who could raise interest rates were rewarded with stronger currencies.  The tide has turned.  The maturing business cycles may have been rolling over before they were pushed by the direct and indirect costs of the two...

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Jobs Data and Tariffs Dominate

Overview:  Global equities continue to recover from the recent slide.  Chinese and Hong Kong markets were on holiday today, but the MSCI Asia Pacific Index eked out a minor gain and ensured that its four-week slide ended.  Europe's Dow Jones Stoxx 600 is up about 0.7% through the European morning.  It is the fourth advancing session this week, and ahead of the US employment data, it is up 2% for the week, which is the best in two months.  US shares are also trading firmer, and the...

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US Tariff Threats on Mexico Compete with ECB for Attention

Overview:  The implications of President Trump's assessment that there has not been "nearly enough" progress in negotiations with Mexico that would avert the tariff on June 10 competing for investors' attention, which had been squarely today's ECB meeting.  Minutes before Trump spoke Fitch cut its sovereign rating for Mexico to BBB from BBB+, while Moody's cut its outlook to negative from stable. The risk-off mood was seen in Asia, where most equity markets fell, though Hong Kong,...

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