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The USD extended to fresh post-taper highs before settling lower. The BoJ maintained monetary policy unchanged, reaffirming its commitment to expand the monetary base by an annual 60-70 tln yen, as was widely expected and to little impact, though USD-JPY appeared to acknowledge the contrasting BoJ versus Fed stances with a rally to a fresh major-trend peak of 104.59. Read more
The dollar was mixed in N.Y. trade on Thursday, though was in a relatively narrow range overall. The USD index held the bulk of post-FOMC gains, as the greenback perked up some against the euro. USD-JPY was steady over 104.00, while USD-CAD faded after posting multi-year highs over 1.0700. Read more
In my previous year-end column, I looked at the big economic stories for 2013. Today, I want to take a look into 2014 to see what might be in store economically. So, here are what could be the big economic developments coming down the pike in 2014. Will the EU return to growth? Starting with the Greek crisis, continuing with the Cyprus default and following through over the negative GDP growth between mid-2012 and 2013, the EU has had a terrible three years. Read more
The dollar consolidated in subdued trade following the across-the-board gain it saw following the Fed's decision to commence QE tapering. USD-JPY dipped to a correction low of 103.88 in Tokyo, down nearly 50 pips from the post-Fed major trend high of 104.36, before settling around 104.00. Read more
One disagrees with Bill McBride a/k/a Calculated Risk a/k/a The Nicest Blogger On The Internet at one's peril, especially when it comes to housing, but that is what I am about to do. Bill (link: http://www.calculatedriskblog.com/2013/12/update-looking-for-stronger-economic.html) has written that he is looking for stronger economic growth in 2014 in part because he expects that "the housing recovery should continue." Unless the interest rate spike that began in April 2013 abates, I disagree that the housing recovery will continue, and that will have a negative effect on growth rates by the end of 2014. Below I have plotted the YoY changes in housing permits vs. Read more
The USD recovered from an initial dip and rallied pretty much across the board in the wake of the Fed's announcement of a $10 bln QE taper. The U.S. currency traded like an 'asset currency' as it rebounded from an initial dive in sympathy with Wall Street as the Fed signalled a slightly more dovish forward guidance to offset the taper, with the exceptionally low stance to remain in place until unemployment falls well below 6.5%. Read more
The greenback was mixed in very light pre-FOMC trade, losing some ground to the euro and pound, while posting modest gains against the yen and CAD. Stronger November housing starts raised some eyebrows, and added another positive data point into the Fed announcement. Read more
Earlier today, the Office of National Statistics reported that UK unemployment dropped .2%: Read more
A rally in sterling following an unexpected dive in U.K. unemployment broke up otherwise subdued pre-FOMC trade in forex markets. EUR-USD remains at familiar levels in the mid-1.37s, and USD-JPY continued to feel gravitational pull around 103.00. The market lacks impetus into the FOMC announcement as the odds of the Fed declaring the commencement of tapering are about the same as a coin flip. Read more
EUR-USD remains at familiar levels in the upper 1.37s after subdued pre-Europe, pre-FOMC announcement Asian trade, with both upside and downside flurries yesterday having proved short-lived . USD-JPY, meanwhile, has continued to orbit the 103.00 level, recovering in Tokyo after orbiting to a distance of 102.50 in New York yesterday. Read more
