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International Economic Week in Review: OECD and IMF Issue Warnings

By: HaleStewart

This week, both the IMF and OECD issued policy papers that lowered growth projections for the advanced economies and argued that downward risk possibilities had increased. The issuance of both these documents provides a good opportunity to take stock of the economic position of the major NCM (non-currency manipulated countries) countries as well as highlighting the problems they are facing as outlined in these two reports. EU: The EU is easily the economy most at risk. Read more

XE Market Analysis: North America - Sep 19, 2014

By: XE Market Analysis

The dollar is generally firmer with EUR-USD lower by over 50 pips from yesterday's New York closing levels, having seen a low of 1.2866. A similar price action was seen in other pairings, including Cable, which dropped back under 1.6400 after logging a two-week high at 1.6525 as the market reacted to the decisive "No" to independence outcome of Scotland's referendum. Read more

XE Market Analysis: Europe - Sep 19, 2014

By: XE Market Analysis

Sterling rallied as Scotland voted "No" to independence, avoiding what would have been a chaotic break away from the United Kingdom. With 31 out of the nation's 32 council areas having declared after Thursday's vote, as of the time of writing, the No side has an unassailable lead. Read more

XE Market Analysis: Asia - Sep 18, 2014

By: XE Market Analysis

Post-FOMC profit taking weighed on the dollar in N.Y. trade on Thursday, despite firmer yields and another Wall Street rally. The greenback was supported briefly by a much lower than expected initial jobless claims print, though it appeared the FX market took advantage of the bounce to sell into. Read more

Housing: down m/m, but YoY trends show apartments still carrying the market

By: New_Deal_democrat

The first take from this morning's housing report was that it was poor. Several reports have emphasized a big drop in multi-unit permits and starts. As someone who came to the "Housing Slowdown" party early - i.e., at the end of last year, when most people were bullish, and who now believes that the bottom of the slowdown was early this spring, I see this report as consistent with some improvement in housing in the coming months. First, a quick recap. Read more

Understanding Yellen

By: HaleStewart

Yesterday the Fed announced in its statement that it would keep rates low for a "considerable time." However, Yellen's press conference all but made that point moot, as noted in the Financial Times article reviewing yesterday's Fed actions. While this might make Fed watching a bit confusing, three charts clarify Yellen's mindset. Read more

XE Market Analysis: North America - Sep 18, 2014

By: XE Market Analysis

The dollar has been mixed since the New York close yesterday, with USD-JPY extending to a fresh major-trend high of 108.67, before settling to the 108.30 area, while the greenback corrected some of the gains seen in the wake of the FOMC statement yesterday against the euro and other currencies. Read more

Loosening Oil choke collar + higher nominal wage growth = improving real wage growth

By: New_Deal_democrat

One of my bigger themes over the last few years has been how much the secular rise, and then plateauing, of the price of gas, has impacted the economy. Briefly, gas went from under $1 a gallon in 1998 to $4.25 a gallon in 2008. Although not so sudden as the two "oil shocks" of 1974 and 1979, the end result was a similar impact of consumers' wallets. When gas prices plummeted to about $1.40 a gallon at the end of 2008, they heralded an upturn in consumer spending which was one important contribution factor to the recession bottoming out in mid 2009. Since then, the change in the price of gas has continued to have a large behind-the-scenes affect on consumers and the economy, the latest demonstration being this morning's -0.2% decline in the CPI. First, let's look at the YoY% change in the price of gas (green, divided by 10, better to show the trend) and compare it with the YoY% change in CPI (red) for the last 5 years: It's easy to see that changes in the price of gas have largely determined the trend in the overall CPI. Read more

XE Market Analysis: Asia - Sep 17, 2014

By: XE Market Analysis

The dollar took an early hit in N.Y. on Wednesday, following a cooler than expected August CPI report. The greenback sold off to session lows, though eventually perked up some into the London close. EUR-USD peaked at 1.2981 after the data, before putting in a floor of 1.2938, just under London's base. Read more

Stable Oil Prices Are Making Central Banking A Lot Easier

By: HaleStewart

Professor James Hamilton, who blogs over at Econbrowser, has done a large amount of research on oil prices and recessions. His conclusion is that oil price shocks have been a primary reason for most post-WWII recessions. Also adding to oil's importance from a central bank policy perspective is its inflationary importance. Read more

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