$3.2 billion. That’s the record trade surplus Australia’s Bureau of Statistics announced on August 3, thanks in part to Chinese demand for the country’s rich iron ore and coal exports. And that’s just the latest good news from the island continent that has speculators feeling bullish about the Australian dollar (AUD).
[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.
[Read more...]Russia’s Central Bank Could Boost the Australian and Canadian Dollars
June 24, 2010 by Leave a Comment
The world’s third-largest foreign exchange reserve is about to become even more diversified.
First Deputy Chairman Alexei Ulyukayev of the Russian central bank said it is looking to move into other currencies in the near term. The biggest beneficiaries are likely to be Australian and Canadian dollars – opening a door for long-term appreciation for both.
[Read more...]Investor Concern Causes a Move Back to Dollars
April 8, 2010 by Leave a Comment
The dollar moved higher throughout the trading day, and the rally continued in overnight trading. Just about all of the major currencies were down, with the Singapore dollar (SGD) and Japanese yen (JPY) the only two that saw a positive return versus the greenback. This would indicate that Wednesday was a ‘risk off’ day, as investors moved money out of higher yielding currencies and back to the carry trade funding favorites of the yen and US dollar.
[Read more...]Confident Investors Move Dollar Lower
March 29, 2010 by Leave a Comment
Investors headed back into the currency markets Friday feeling more confident in the global recovery, after US GDP for the fourth quarter of 2009 held at 5.6%. The combination of good US growth, a possible solution to the Greek debt crisis, and the passage of Obama’s healthcare overhaul had investors almost giddy as they put money back to work in the markets.
[Read more...]Currency Market Mix Up
March 23, 2010 by Leave a Comment
The currency markets were a bit mixed yesterday, with half the currencies higher versus the US dollar, and half lower. The markets seemed confused, and didn’t hold to ‘normal’ trading patterns. The three best performing currencies versus the US dollar were the Brazilian real (BRL), British pound (GBP), and Japanese yen (JPY). That is an odd group! At the top spot, we have the Brazilian real which is a commodity-based currency with some of the highest yields available; which would lead you to believe that the risk trades were back on. But the Japanese yen was the third best performer, and the yen is a currency that typically moves higher when the markets are nervous and reversing out of carry trade positions. And who in the world would be buying the pound sterling right now? Something just wasn’t right in the currency markets yesterday. The overnight markets started to set things right, pounding the pound sterling lower; but the currency markets still don’t seem to be able to agree on a direction to take the dollar.
[Read more...]Economic Releases Drive Currency Markets
December 23, 2009 by Leave a Comment
The currency markets were a bit more volatile yesterday, as we got some surprising data releases here in the US… But after the dust settled, the dollar closed out the day pretty much right where it had started versus most of the major currencies. Gold and silver continued to slide, but the price of oil moved up a bit. Today we will get another big round of economic data, which could cause some more volatility in the markets.
[Read more...]
Anticipating the US Dollar’s Response to QE2
Another election day has come and gone, and I for one am happy to see it over with, as I hate all of the political ads and phone calls during the heat of the election cycle. My wife and I went to the polling place together after dinner last night and the workers said the turnout was a bit better than usual for a mid-term election. The currency markets were a bit mixed yesterday, as the higher yielding currencies did well versus the US dollar ahead of today’s FOMC announcement. The euro (EUR) also moved up a bit in spite of renewed worries about sovereign debt. More on the currency markets in a bit, but I will start today’s Pfennig with the two big stories of the day.
[Read more...]Click for detailed story