Analysis Topic: Currency Market Analysis
The analysis published under this topic are as follows.
Tuesday, May 22, 2007
The Decoy of the Falling US Dollar Revisited / Currencies / US Interest Rates
By: Professor_Emeritus
I have received the following letter from a reader of my column:
Mr. Fekete:
I have been reading your work for a number of years and always look forward to your thoughts, particularly when they run counter to conventional wisdom. In your latest piece you suggest that the falling dollar (or rising yen) actually strengthens the yen carry trade. My chartwork argues otherwise, and your logic escapes me. I would welcome clarification of one particular paragraph of yours, especially on the last sentence that, I believe, is central to your analysis. You wrote:
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Thursday, May 17, 2007
Strong US Dollar is in US Interest / Currencies / US Dollar
By: Axel_Merk
It seems that in order to qualify for the job, U.S. Treasury Secretaries must be able to recite ‘A strong dollar is in the interest of the United States' anytime and anywhere. Robert Rubin, Treasury Secretary during the second half of the 1990s, was highly credible when he said it.
However, when Secretary John Snow uttered the same words, the ritual had been diluted to providing the appropriate sound bite to the media. Hank Paulson, successor to Snow and current Treasury Secretary, is a straight talker, but knows that his job comes with what amounts to a marketing responsibility. In the meantime, investors are at a loss what the U.S. policy towards a dollar truly is; there seems to be a disconnect between what ought to be in U.S. interest, and what current policies promote.
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Wednesday, May 16, 2007
Euro Currency Toast and The Race to Debase, Part II / Currencies / Euro
By: Adrian_Ash
"...The €500 note is more bling than a gold-plated Uzi. No wonder it's become so popular with gangsters in Moscow ..."
FOREIGN AFFAIRS magazine just called for the "end of national currency". Maybe it matters.
After all, " Foreign Affairs is the most important and influential journal of international relations in the world," as Cryptogon.com points out.
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Friday, May 11, 2007
US Dollar Bear Market 5 / Currencies / US Dollar
By: Zeal_LLC
Adam Hamilton writes : With the headline US stock indexes doing so well this year, they are understandably absorbing trader attention and news coverage like a black hole. It is always exciting to see major new round numbers achieved and new highs carved. But other markets outside of this limelight are not frozen in stasis.
In particular the US dollar, seemingly totally forgotten in the dark shadow the stock markets are casting, has been exceedingly interesting. While you wouldn't know it from the mainstream financial media thanks to very little commentary on it, the US dollar's secular bear market is very much alive and well. In fact today it is on the verge of testing major major new lows.
If the dollar indeed continues on its stealthy downward trajectory and hits these new lows, the implications will probably be profound. Especially for American investors and speculators, the dollar is the linchpin of everything financial. When foreign investors see new dollar lows, will the massive inflows of capital they pump into our financial markets waver? What would this mean for US stocks, bonds, and interest rates?
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Thursday, May 10, 2007
Update of the US Dollar Index Forecast / Currencies / US Dollar
By: David_Petch
I thought it would be good to post the USD action of late and why it is affecting other markets. I will not be posting any other technical analysis reports for sometime. Instead they will be research-related topics over the course of the next 4-6 months. An article I plan on releasing 3-4 weeks from now is titled “Busy Bee Bugaboo and Another Unsuspecting Agent of Doom”
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Thursday, May 10, 2007
The Russian Bear, Chinease Dragon, and US Dollar / Currencies / US Dollar
By: Jim_Willie_CB
Russia and China have become a major problem. Everywhere one turns, there is Russia & China at odds with the United States . We have the Great Bear in a conflict over energy, Iran , military installations, and central bank policy. We have the Great Dragon in a conflict over currency reform, banking reform, copyright enforcement, trade matters, human rights, and central bank policy.
Armed with a combined account of almost $1600 billion, these two giants are in a Battle of Titans with the United States for geopolitical control. With the financial shift to developing nations comes a natural push toward geopolitical control. The USEconomy and USDollar have never been in a weaker position. The bear and dragon know it well, and have taken steps to wrest more power and influence.
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Thursday, May 10, 2007
Euro Currency toast & the race to debase, Part I / Currencies / Euro
By: Adrian_Ash
"...If you think the Dollar looks weak on the charts, wait 'til you see what's wrong with the Euro..."
SERIOUS ECONOMISTS never much liked the Euro. Then again, serious economists never much bothered to make money from trading. John Maynard Keynes just goes to prove it.
World-famous scourge of both gold and "the long run", Keynes averaged nearly 13% per year trading the funds of Kings College , Cambridge , during the Depression. London 's stock market, meantime, ticked lower by half-a-per cent per annum.
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Tuesday, May 08, 2007
Brazilian Real The Strongest Currency in the World Today / Currencies / Brazil
By: Money_and_Markets
When I first went to Brazil, I was six years old.
A new Chevy cost $1,300.
Gasoline was going for 27 cents a gallon.
Harry Truman was still in the White House.
And my father wanted a second home in the tropics.
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Friday, May 04, 2007
US Dollars Supplied at Will, Courage Hard to Find / Currencies / US Dollar
By: Doug_Wakefield
Doug Wakefield with Ben Hill write: Last weekend, my wife and I went over to a friend's home to watch “The Pursuit of Happyness,” starring Will Smith. During the opening scenes of the movie, Smith's character sits in despair thinking about his own struggles in medical sales, during the recession of 1981, while the television blares in the background with the voice of President Reagan discussing the financial plight of our nation. In this snippet, we hear Reagan talk about the urgent need for our national leaders to face the $50 billion deficit.Read full article... Read full article...
Friday, May 04, 2007
Watch the French Elections and Neutral US Payrolls to Target Euro 1.3470 / Currencies / US Dollar
By: Ashraf_Laidi
We mentioned in Thursday morning's note that: "a strong services ISM from the US including a favorable employment index is expected to trigger renewed euro selling towards 1.3570, a break of which could extend to 1.3545-50". Indeed, EURUSD fell from 1.36 to 1.3570 and is now trading at 1.3548, with the low being 1.3547.
This point represents the 38% retracement of the $1.3339-1.3680 move. But we do expect the pair to stabilize back towards the 1.3580s by Friday European trade ahead of US payrolls.
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Tuesday, May 01, 2007
Can the “Axis of Crude Oil” Topple the US Dollar? / Currencies / US Dollar
By: Gary_Dorsch
Were it not for its “reserve currency” status, slowly turning into a post-World War II relic, the US dollar would have already collapsed by now. A string of $4.4 trillion of US trade deficits since 1996, and a heavy reliance on foreign money to fund its external imbalance, has severely weakened America's global economic leadership over the past five years.
The US dollar survives, due to America's political stability, its military might in the Persian Gulf, its large $12.5 trillion economy (28% of global GDP), and deep and liquid financial markets for bonds and stocks.
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Monday, April 30, 2007
Forgive me for being blunt, but the U.S. dollar is sinking into the toilet / Currencies / US Dollar
By: Money_and_Markets
Martin Weiss writes : Yesterday, we enjoyed the gala finale of the ballroom dance competition here in Venice and we finally had some quality time off.
But this morning, we'll soon be on our way to the Venice airport for our flight back to the U.S. So forgive me if my message to you is both brief and blunt:
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Friday, April 27, 2007
How Far Can The US Dollar Index Go? / Currencies / US Dollar
By: Mario_Innecco
The dollar index measures the dollar's performance against the world's other major currencies. According to Bloomberg the index is weighted as follows: 57.6% euro, 13.6% Japanese yen, 11.9% British pound, 9.1% Canadian dollar, 4.2% swedish krona and 3.6% Swiss franc.
The chart below shows how the index has formed a massive head and shoulder formation over the last fifteen years. The neckline of this formation is formed by connecting the low of 80.05 in April 1995 and the low of 80.39 in December 2004.
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Thursday, April 26, 2007
Investment Flash: Is the US Dollar Going To Fall Off The Cliff? / Currencies / US Dollar
By: Paul_Lamont
Financial markets trade on future expectations. At turning points, the majority of investors position themselves on the wrong side of the trade. Simply put, on each side of the trade it's either money or numbers.
We position ourselves with money and against numbers. For example, days after Hurricane Katrina had hit the U.S., the belief that crude oil could only go higher was widespread. In fact, on Sept 7 th , 2005 96 % of advisors and analysts surveyed by CONSENSUS, Inc. were bullish on oil (chart below). Or simply put, big numbers were betting against big money. And what happened? The crude price subsequently fell 20%. Big money won.
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Thursday, April 26, 2007
US Dollar Myths / Currencies / US Dollar
By: Axel_Merk
Without shying away from controversy, we do away with a number of myths of why the dollar ought to move up or down.
Myth I: The dollar is safe because the U.S. has ample assets
Some say the current account deficit that requires foreigners to arrange for over $3 billion of capital inflows every business day just to keep the dollar from falling does not matter. These pundits say a deficit of 6.5% of Gross Domestic Product (GDP) is sustainable because the deficit is only about 1% of all private assets held in the U.S.; as a result, deficits could be carried a long, long time.
Tuesday, April 24, 2007
Currencies, They Are All Sinking! Part II / Currencies / US Dollar
By: Mario_Innecco
Last December we wrote in “They Are All Sinking” about how our present monetary system is a dollar based system and how it has evolved. We also noted how all the major so called hard currencies, along with the dollar, had been losing value against gold since 2001. In part II we will be giving an update on how the major fiat currencies are faring against gold at the present time.
We recommend readers go over to part I in order to get a better idea of how our fiat monetary system has evolved.
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Wednesday, April 18, 2007
China's GDP May Threaten Yen Carry Trades / Currencies / Yen Carry Trade
By: Ashraf_Laidi
Going into Thursday's trading, FX traders will watch the return of major economic data from the US and Canada. But before previewing these events and their FX implications, it's worth giving synopsis on what happened in the NY session. There are some doubts about the durability of the carry trade (selling yen across the board simultaneous with rising gold and equities).
We have seen in early morning NY (around 8-9 am EST) how the yen rallied across the board, dragging the dollar, pound and euro. Rumors of a hedge fund caught in the wrong side of the rising pound and as well as rumblings of renewed reports of sub-prime defaults also led to some unwinding, which caused US stocks to open lower. With US equities struggling into record territory, a loss of momentum could easily turn into sharp selling in the event of a weak reading in the leading indicators and Philly Fed index.
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Sunday, April 15, 2007
What Does a Dollar of Debt Buy You? / Currencies / US Dollar
By: John_Mauldin
This weekend I am in La Jolla at good friend Rob Arnott's conference. Princeton Professor Burton Malkiel, of Random Walk fame, will be one of the luminaries at the annual Research Affiliates Advisory Panel. So, with that thought in mind, this week we take a seemingly random walk through the data to see if we can discern a trend.
How much debt does it take to grow GDP? You probably missed it, but the Bureau of Labor Statistics gives us data that contradicts the recent labor numbers. Why is consumer sentiment so moribund? And that recession I predicted for 2007? I have a few thoughts on that as well. It should make for an interesting letter with a lot of great charts and graphs.
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Friday, April 13, 2007
US Dollar Perched Precariously on a Precipice / Currencies / US Dollar
By: Peter_Schiff
The dollar is no longer responding to traditional stimulants. This week, despite the apparently "hawkish" tone in the recently released Fed minutes, and trade deficit figures that were slightly less horrific than expected, the dollar nevertheless declined against just about every currency on the planet. As a result, it now teeters dangerously close to the edge of a very large precipice. Looming large is the 80 level of the U.S. Dollar Index which has stood as long term support for almost thirty years.
This week, the Index broke below 82, and is sinking fast. When this critical level is breached, look out below. Without any support beneath it, the dollar could literally fall off a cliff.
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Thursday, April 12, 2007
Unsustainable Trade Deficit Means Doomsday for the Greenback / Currencies / US Dollar
By: Mike_Whitney
The American people are in La-la land. If they had any idea of what the Federal Reserve was up to they'd be out on the streets waving fists and pitchforks. Instead, we go our business like nothing is wrong.Are we really that stupid?
What is it that people don't understand about the trade deficit? It's not rocket science. The Current Account Deficit is over $800 billion a year. That means that we are spending more than we are making and savaging the dollar in the process. Presently, we need more than $2 billion of foreign investment per day just to keep the wheels from coming off the cart.
Everyone agrees that the current trade imbalances are unsustainable and will probably trigger major economic disruptions that will thrust us towards a global recession. Still, Washington and the Fed stubbornly resist any change in policy that might reduce over-consumption or reverse present trends.
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