Front and center this morning, Australia printed a moon-shot second quarter GDP report, that has the risk aversion campers running for cover this morning. All currencies, except the risk aversion currencies of dollar, yen (JPY) and francs (CHF), are getting sold, and the Aussie dollar (AUD) has gained 1 1/2-cents!
[Read more...]What to Expect from Second Quarter GDP
August 27, 2010 By Leave a Comment
The currencies are trading in the same clothes as yesterday. It’s almost like the movie Groundhog Day, for the euro (EUR) has performed the say way as the previous sessions… For instance, the euro rose up to 1.2765 yesterday, only to fall back to just above 1.27, and then overnight, like the previous night, the euro rose to 1.2740, only to see it fall back again.
[Read more...]Existing Home Sales Plunge!
August 25, 2010 By Leave a Comment
An awful Existing Home Sales report yesterday is causing more people to jump on my bandwagon… You know, the one about the double dip recession, which will be fueled by another housing slump… Of course I call it a double dip, but in reality, I truly believe it to be a “single scoop,â€� for I don’t believe like our government officials, and Fed Heads that we “came out of the recession.â€�… But that’s just me, thinking logically, as always!
[Read more...]Bailing On a Canadian Dollar Rate Hike?
August 23, 2010 By Leave a Comment
So, it looks to me that all my warnings about the euro (EUR) not being out of the woods just yet, were bang on… You see the “heatâ€� is back on the Eurozone’s debt problems, which is strange in that there were two successful bond auctions by member countries last week… You see, to me this is nothing more than the old saying about when the US sneezes the rest of the world gets a cold, is coming into play right now.
[Read more...]China Reduces Treasury Holdings
August 17, 2010 By Leave a Comment
Front and center today, the TIC flows data from June was very interesting yesterday… Before we get into this, let me explain what I’m talking about for the new “kidsâ€� in class… TIC stands for Treasury International Capital, and it’s just a fancy way of saying that someone is tracking the net security purchases… Why is this important? Well, security purchases by foreigners is how the US finances its ever growing deficit. For example, the trade deficit and foreign direct investment makes up the current account… But just to keep this simple, the trade deficit in June was $49.9 billion… The net security purchases to finance that deficit in June was… $44.4 billion…
[Read more...]Japanese Yen Hits a 15-Year High Versus the US Dollar
August 12, 2010 By Leave a Comment
I told you yesterday that the FOMC had set off some fireworks with their statements the other day, and those fireworks turned into a major sell-off in the risk assets yesterday… Stocks, currencies and commodities, all sold in a major way!
Stocks were down 2.5%, the euro (EUR) was down three whole cents, and gold lost ground… I would think that the 3-cent sell-off was a bit overdone… We’ll have to wait-n-see… But there was good news for Japanese yen (JPY) holders… The yen hit a 15-year high yesterday, when it traded, albeit briefly, below 85… I was a foreign bond and currency trader at the old Mark Twain Bank in 1995, and I truly recall when yen was 85 in 1995… I have to say that, in some ways, those days are very reminiscent of today… Like investors flocking to yen when yields are non-existent and the country is wallowing in deflation and a rising national debt…
[Read more...]Will There Be More Stimulus from the FOMC Meeting?
August 9, 2010 By Leave a Comment
Yesterday, I got all caught up with what Chris had to say last week, and let me stop here to say a BIG “Thank Youâ€� to Chris for taking the conn on the Pfennig last week… A great job as usual! Chris did leave me a few notes on the Friday happenings, and that helped me get the “motorâ€� started to write this morning!
[Read more...]The Two Divergent Views of Currency Market Investors
August 6, 2010 By Leave a Comment
The weekly jobs numbers released yesterday morning showed 25K more people signed up for unemployment last week than the week prior. The number of continuing claims declined slightly, but remains above 4.5 million. The data confirms what everyone outside of CNBC has been saying for quite a while; this is a ‘jobless recovery’ (if you can even call it a recovery!) What growth we have had has been spurred by government spending, the private sector just isn’t expanding, and won’t probably expand for some time.
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How Will Census Workers Affect the Jobs Report?
It was a ping-pong day for the currencies, back and forth over the net… The net being the “level of the dayâ€�… For instance, the Aussie dollar (AUD) played over the 91-cent net all day, and the euro played over the 1.2820 level all day.
[Read more...]