Good day… We had another fairly quiet day in the markets on Tuesday, and it looks like most of the currency desks have already been placed on autopilot. Every year we get a lull in trading activity toward the end of the year, as most of the currency investors square up positions and don’t take large bets at the end of the year. Many of the desks are manned by junior staff while the big bosses head out for their holiday vacations (EverBank WorldMarkets included). But for the first time this week, we will have a pretty good bunch of data releases here in the US, so we could see a bit more action in the markets. With thinner trading volumes, a rogue piece of economic data can have a major impact on the markets.
[Read more...]US Dollar Rallies on Safe Haven Buying and EU Debt Crisis
December 20, 2010 by Leave a Comment
Worries over the sovereign debt crisis have pushed investors out of the euro (EUR) and into the US dollar. The “risk� trades have been pulled off the table, and investors are seeking shelter in the relative safety of the dollar. I had a reader ask me what I was looking at on Friday when I wrote that the euro had ticked higher versus the US dollar. Apparently I need to remind everyone that I write this at around 5 AM, so when I talk about the euro moving higher, it is in the early European trading. On Friday, the early euro strength was quickly reversed as the US trading desks took the dollar higher.
[Read more...]Euro Rallies After EU Summit Sgreement
December 17, 2010 by Leave a Comment
Last time I sat in for Chuck, the markets took us on quite a ride; but with the end of the year within sight, and most of the trading desks short-staffed, I don’t think we will see a lot of big positions being put on the books. Should be a fairly quiet couple of weeks to end out 2010… (Chuck would tell me I just jinxed any hopes of lower volatility!!)
[Read more...]Global Currencies Rally Against the US Dollar
December 10, 2010 by Leave a Comment
Well… I’ve spent a lot of time this week talking about the rise in Treasury yields… Apparently the rise in yields wasn’t confined to Treasuries, as municipal bonds are getting whacked too… I saw that my friend and former colleague, David Galland, had this to say about the problems with the municipal bonds…
[Read more...]Sorting Out the Tax Cut and Unemployment Benefits Extensions
December 8, 2010 by Leave a Comment
When I turned on the currency screens this morning, I saw that the euphoria of a currency rally, which we had talked about yesterday, had dissipated. I said to myself that it’s a case of “another day, another currency directionâ€�… It all began mid-day yesterday, with gold and silver once again leading the way…only this time the way was down! UGH! Gold was down $24 as I left for the day… It’s down another $5 this morning…
[Read more...]The Currency to Buy in Times of Crisis
December 3, 2010 by Leave a Comment
On Nov. 22, the Irish government broke down and accepted a massive 85-billion euro ($113 billion) bailout package from the European Union and International Monetary Fund. The move was supposed to alleviate fears of an EU-wide credit meltdown. Instead, concerns that Spain or Portugal could be next to default have kept Europe in crisis mode.
[Read more...]Currencies Move as North and South Korea Exchange Artillery
November 23, 2010 by Leave a Comment
Well… How do you feel about the roller coaster ride we went on yesterday? I know, it knocked the wind out of me, and the risk assets… And yes, I did keep my arms and legs inside for the ride, but the whipping around was just too much for me! And the risk assets… So, I’ll stop beating around the bush, and get to the meat…
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US Data Indicate Slow Economic Growth
The dollar stayed in the tight range in which it has been trading over the past week. The range of the dollar index over the past 5 days has been just 0.71%. Talk about stable markets! We had a plethora of data released here in the US yesterday, with most of the numbers coming in below expectations. The big number was third quarter GDP, which was reported at 2.6% compared to an estimate of 2.8%. While the number failed to reach economists upbeat estimates, it was slightly higher than the previous estimate of 2.5% growth. Personal consumption for the third quarter also came in below expectations with a 2.4% increase compared to predictions of a 2.9% rise. And the final piece of data in the GDP group, the GDP Price Index, rose 2.1% versus survey estimates of 2.3%.
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