The European leaders were battling a pretty major storm that the ratings agencies helped create late last week when S&P cut the ratings on 9 euro-region countries. The most dramatic move was the loss of France’s AAA rating, leaving Germany as the sole AAA rated country in the currency union. Austria also lost its AAA rating while Italy and Spain fell by two notches and Portugal’s debt was cut to junk status. The ratings of Malta, Cyprus, Slovakia, and Slovenia were also lowered.
[Read more...]Euro Rallies on Positive IFO Index and a Successful Spanish Debt Auction
December 20, 2011 By Leave a Comment
The euro (EUR) sure enjoyed a better night rebounding from close to its annual low versus the US dollar. A surprisingly upbeat IFO business climate index combined with a pledge of more funds for the bailout and a positive Spanish auction to send the common currency higher. The IFO Institute’s index, based on a survey of 7,000 German business executives, rose to a three-month high of 107.2 from 106.6 in November. Economists had expected the index to drop to 106. November’s number had surprised on the upside also, so this month’s value certainly seems to confirm a trend that indicates Germany’s economy may be able to push through the credit crisis to remain on a solid growth path.
[Read more...]Confidence in the EU Helps Rally the Markets
November 29, 2011 By Leave a Comment
Good day… Chuck felt it was best to sit out one more day as he tries to recover from a major cold he came down with late last week. He wanted me to share a few of his thoughts with the Pfennig readers this morning, so I’ll start right off with them. Take it away Chuck…
Here are some observations from the cheap seats, where I sit on I.R.
[Read more...]A Greek Resolution…For Now
June 17, 2011 By Leave a Comment
Front and center this morning… There was a story that hit the newswires in the European session that claimed the bailout of 150 billion euros was close to being agreed on by all parties… The euro (EUR) shot up on this news, and is back to 1.42, after spending most of yesterday with a 1.40 handle, and looking very much in need of some medicine… Well, that medicine came in the form of an unsubstantiated newswire story… I say that because there is no proof that this is the case. So… Don’t get too comfy, cozy, with the 1.42 handle in euros… The rug could be pulled on that rally in a New York Minute…
[Read more...]DXY Shows the US Dollar Was Best Performer in May
June 1, 2011 By Leave a Comment
I want to start off this morning by wishing Chuck good luck with the ‘procedure’ he will be going through today. Chuck is constantly having to go in to get poked and prodded by his doctors and I am impressed at how positive he remains through all of these doctor’s visits. He told me this wasn’t a ‘big’ deal and everything should be fine, but after the past few years I think Chuck has a slightly different view than the rest of us on what a ‘big’ deal is. So we should all say a quick prayer for Chuck and his doctors.
[Read more...]What the IMF Chief’s Arrest Means for the European Debt Crisis
May 16, 2011 By Leave a Comment
The big news over the weekend was the arrest of Dominique Strauss-Kahn who is the managing director of the IMF and had his sights on the French Presidency. Strauss-Kahn was arrested while sitting on a plane bound for a meeting with German Chancellor Angela Merkel to discuss the European sovereign debt crisis. His arrest will undoubtedly complicate the negotiations underway today in Europe.
[Read more...]US Dollar Declines But Stays in a Tight Range
May 11, 2011 By Leave a Comment
The dollar slipped a bit against most of the major currencies yesterday, but moved back up overnight and most currencies are right where they were when I hit the send button yesterday. Both the Japanese yen (JPY) and Swiss franc (CHF) traded lower yesterday as gains in the equity markets and commodities gave investors a bit more confidence in the global recovery. The euro (EUR) rose yesterday, but traded back off in early European trading as German Chancellor Angela Merkel suggested she may make it difficult for Greece to get more help. The bounce in commodities helped push both the Canadian (CAD) and Australian dollars (AUD) up a bit, and the British pound (GBP) rallied after inflation expectations were increased.
[Read more...]Interest Rate Differentials Drive the Currency Markets
March 30, 2011 By Leave a Comment
Even though this month has been one of the most volatile with the Japanese earthquake and wars in the Middle East, the currency markets are settling back into a familiar pattern. Interest rate differentials are again in the driver’s seat, and “risk” trades are riding shotgun, forcing safe haven trades into the back seat.
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Commodities Take Off!
The Greek talks returned to the headlines this morning. I know I said this last Friday, and I was a little too optimistic and turned out to be wrong! But… I do expect this agreement on a private-sector involvement in Greek debt to get hammered out this weekend… It seems that the opposition from eurozone policymakers is backing off, and that has me optimistic once again.
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