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...]Can Foreign Intervention Save the US Dollar?
November 9, 2010 by Leave a Comment
The Federal Reserve’s $900 billion asset purchasing program may help the US economy…or maybe it won’t. But one thing is certain – the US dollar will be the biggest loser. In fact, just about every currency you can name is set to eclipse the greenback over the next few months.
[Read more...]PIIGS Return to the Slaughter
November 5, 2010 by Leave a Comment
Friday is finally here… The end of what has been an exhausting week here on the trade desk. The dollar continued to get beat down through most of the trading day but started to rally back a bit in the afternoon. Overnight the dollar actually gained with the highflying Nordic currencies falling almost 1% versus the greenback. The euro (EUR) and commodity-based currencies also sold off a bit, and the sharp rally in both gold and silver stalled. A break in all of the price action was to be expected, but it may not last long as we will get the October US jobs report later this morning.
[Read more...]New Home Sales Ignite a Risk Asset Rally
July 27, 2010 by Leave a Comment
Yesterday morning I told you that the currencies, for the most part, were flat… That didn’t last too much longer… The US printed what the media and markets thought was a fabulous New Home Sales report, and the rally in risk assets was “onâ€�! With stocks and currencies in rally mode, gold and silver backed off… I’ll talk about that trading theme we’ve seen lately in a minute, but first… Let’s talk about the housing data…
[Read more...]High Yielders Sell Off on Bad US Existing Home Sales Data
June 23, 2010 by Leave a Comment
Yesterday, after the currencies had sold off in the overnight sessions, they traded throughout the US session in a tight range, with a bias to move higher, but were not able to mount any kind of sustained move against the dollar.
This morning, the overnight sessions have left the euro (EUR) about where it was yesterday morning. The worst performers are the ones that were the best performers on Monday… The high yielders… Aussie (AUD), kiwi (NZD), South Africa (ZAR), Norway (NOK), and even Canada (CAD), not that it’s a high yielder, but since Canada was the first G-7 nation to raise rates, they get some credit…
[Read more...]Alan Greenspan Talks Deficit Financing
June 18, 2010 by Leave a Comment
We’ve had a day where the currencies gained versus the dollar, and then held their ground, for the most part… No profit taking, no debt crisis fears trading, just held their ground versus the dollar. Now, some would say… “That’s a sign that they’ve hit resistance and can’t overtake it, which is not good for a rising assetâ€�… But, me? Well, I would say, and will say… “I find this to be refreshing. The last thing you want to see is an asset, which in this case is a currency like the euro, run up too much, too fast, for that WILL give the markets reason to sell. I prefer the slow gradual, stealth-like moves in currencies, so that they don’t gain any attention, until the rally is well established.â€�
[Read more...]ADP Versus BLS: Which Jobs Number to Trust
June 4, 2010 by Leave a Comment
Today is the Big Jobs Jamboree, and the cable news stations are spinning it quite nicely. So nicely put that stock jockeys are believing the spin and running stock futures higher. I’ve got that to talk about today, and more debt stuff… Believe me, dear reader, I wish I didn’t have to talk about this debt stuff, but I feel as though me and a few of my friends are the only ones doing so, and I don’t want you to become like the rest of the country and become “comfortably numb” with the deficit figures!
[Read more...]Bundesbank Sends Euro Lower
May 27, 2010 by Leave a Comment
Recall yesterday’s talk about the trading pattern that had existed for four consecutive days? Well, that was thrown to the roadside yesterday, as the US session went back to beating on the euro (EUR), and other currencies…
[Read more...]
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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