Australian Rate Hike Now Seen as 50-50 Chance
The Australian dollar is has appreciated almost 9% this month against the dollar. The hawkish comments of by the RBA had spurred a shift in the pendulum of expectations toward a rate hike next week. In addition to the firm commodity prices and the favorable PMIs from China had helped spur the buying. However, disappointing [...]
A Sterling Break Out is on the Cusp
The Pound has been a difficult currency to track. Recently the moves in the Sterling have been volatile as investors are trying to determine the future direction of the UK economy. Recently the UK data points have pointed to a weakening economy. Over the weekend, the health of the UK housing market was again cast [...]
EMU PMI Disappoints the Market
The most important economic report on Thursday was the euro zone’s flash September PMI. It was weaker than expected and suggests that market participants may not have adjusted their expectations adequately after the robust growth posted by the region in Q2. Manufacturing reading came in at 53.6, down from 55.0 in August. The consensus had [...]
The Dollar Continues to Slide
Will the dollar index continue to hold trend line support? Or will current technical’s push it over the edged. European investors seemed unperturbed by the new strains in the European bond market and had bid the euro up during the European trading session to $1.3120. North American traders seem more concerned as they were before [...]
Intervention Pushes the Yen Lower
The main development has been Japanese intervention; the first such operation in six years. Although there has been speculation of the likelihood of intervention over the past couple of weeks, the market was still caught off guard. The defeat of Ozawa in his leadership challenge, the immediate threat of intervention appeared to slacken and many [...]
Australian Dollar Breaking Out
The Australian dollar is bucking up against trend line resistance after making a run from a low near 80 cents against the US dollar, to touch a intra-day high near 93.60 cents vs. the dollar on Monday. There are a number of factors that would lead one to believe there are higher prices in store. [...]
BOE Stands Pat, as the Economy Moves Forward
The Bank of England kept rates on hold as widely expected. While there has been much discussion, if not consternation, over the possibility of QEII in the US, many observers have missed the creeping talk, in part encouraged by BOE Governor King, of another round of asset purchases by the BOE. Similar to the Fed, [...]
“Risk Off” Trade is on again
The market has been choppy, and hopefully the FX tips are making life a little easier. Here’s my thoughts this week. US investors were caught off guard by the reversal of sentiment toward Europe. The euro had rallied in the immediate aftermath of the stronger than expected US jobs data ostensibly on a greater appetite [...]
Dichotomy in Europe
The premium Greece, Spain and Portugal pay over Germany on 10-year bonds is greater than it was when Europe announced their so-called 750 billion euro package. The true value was half as that when taking out the 250 billion euro that was said to come from the IMF but there was no commitment to give [...]
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