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Above is a chart of the GBP/USD. The pound rallied from July to January, increasing in value by about 18.5%. The reason for the pound’s rally was the increasing strength of the UK economy, while the US economy printed somewhat weaker numbers. However, over the last few months, the US numbers have been gaining strength. Read more
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The dollar firmed up following the stronger December ADP employment survey, sending EUR-USD to recent lows under 1.3560, and USD-JPY back over 105.00. The stronger data spooked the equity and Treasury markets a bit, with the better data bringing fears of a quicker Fed taper back to the surface. Read more
As I’ve mentioned previously, I very rarely comment on the direction or level of the stock market per se. Typically I just discuss it in the context of being a short leading indicator for the direction of the economy. Read more
The euro came under pressure via EUR-JPY and EUR-USD. The EUR-JPY cross tumbled quite sharply during the European AM session after making a six-day peak of 143.17 in Tokyo trade, falling to a low of 142.20 before finding a toehold. The move seemed incongruous next to solid manufacturing and retail sales data out of Germany, but markets are speculating that the ECB might announce fresh stimulus at its policy meeting tomorrow as disinflation has become a worry for policymakers with Eurozone CPI having dipped to just 0.8% y/y in December. Read more
Yen weakness has been the main theme amid rising stock markets in Asia, following a solid close on Wall Street -- a backdrop that the funding currency of choice typically weakens to. Both USD-JPY and EUR-JPY logged a six-day peaks, of 105.00 and 143.16 respectively. Read more
The dollar was mixed in N.Y. trade on Tuesday, generally posting fairly broad gains early on, before giving them back later. A narrower U.S. November trade deficit helped the greenback to an extent, though EUR-USD support into 1.3600 held up, while USD-JPY ran into offers into 104.70. Read more
Today we learned that the EU is still in the middle of a potential deflation threat with the release of both CPI and PPI. Read more
The dollar is generally little changed versus Monday's New York closing levels. EUR-USD drifted modestly toward the 1.3640-50 area, aided by firm German retail sales and unemployment data. Eurozone HICP dipped to just 0.8% y/y, though this was expected following yesterday's sharp decline in German HICP. Read more
The USD is slightly firmer versus Monday's London closing levels, while the yen weakened after Japanese data . USD-JPY rebounded back above 104.50 after a brief dip under 104.00 during the New York afternoon session. EUR-JPY was also firmer as the Tokyo market sold yen following data that showed Japan's monetary base surged 46.6% y/y in December to a record Y193.5 tln, illustrating the impact that the BoJ's reflationary policy is having (the central bank is targeting a monetary base to Y270 tln by the end of 2014). Read more
The dollar started the Monday session on a firmer footing, though a softer than expected services ISM outcome threw cold water on the dollar, while weighing on Wall Street and tamping down Treasury yields. The negative risk backdrop, and lower yields weighed on interest rate sensitive USD-JPY, taking that pairing briefly under 104.00 from session highs of 104.84. Read more
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