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N.Y. FX trade was fairly nondescript on Monday, with narrow ranges largely the rule. USD-JPY managed a 101.76 to 101.91 trading band, while EUR-USD put in a 1.3535 to 1.3579 band, matching Friday's peak. Risk levels were subdued overall, given geopolitical events in Iraq and Ukraine. Read more
For the month of May, the euro/dollar chart has been moving slowly lower, moving from from the 1.39 level to the 1.35 level. Also note the decrease in momentum over this period, as well as prices now being below all the EMAs -- especially the 200. Read more
The forces of risk aversion stemming from Iraq were felt in FX markets, which had the effect of supporting the CHF and JPY, while the other theme was a secular GBP rally following fresh hawkish BoE-speak, this time from deputy governor Bean who backed up Friday's message of his boss, Carney. Read more
Risk-aversion had some influence currency markets as violence in Iraq continued over the weekend. Most Asian stock markets fell as a consequence, and the yen, following it usual inverse correlation with equities, rallied, albeit moderately. USD-JPY dipped to a low of 101.72, which unwound most of Friday's gain, while EUR-JPY came within a whisker of last week's four-month lows. Read more
Let’s start this week by looking at Japan, where the BOJ announced they would maintain their current interest rate policy and asset buying program. This move was anticipated by the markets, thereby having no major impact. However, we also learned that a revised 1Q GQP increased 1.4% Q/Q and 6.7% Y/Y – both solid numbers. Read more
There was little monthly data for May released this week. Retail sales rose, and April's surge in retail sales was revised to be even stronger. Producer prices fell. Import and export prices were flat. Business and wholesale inventories rose. Consumer sentiment was down slightly. My weekly report on the high frequency weekly indicators is meant to provide an up-to-this-week snapshot of the economy. Read more
The dollar was relatively steady in N.Y. trade on Friday, though generally added marginally to overnight gains. Cable steadied over 1.6950 after its sharp Carney driven gains overnight, while EUR-USD was sold off from 1.3555 at the open to lows near 1.3520. Read more
The dollar traded mixed, losing ground to sterling, which surged on a BoE Carney remark that interest rates "could rise sooner than markets currently expect," and the euro, while gaining slightly versus the yen and Aussie. Cable surged over two big figures to a high of 1.6992, stalling just four pips short of May's major trend peak, while EUR-GBP dove below 0.8000. Read more
GBP surged on hawkish BoE speak with BoE's Carney signalling at a keynote speech last night that interest rates could rise sooner than markets expect and that the housing market was now "the greatest risk to the domestic economy." This will invite markets to re-price in a 25 bp hike before year-end. Read more
The dollar lost some ground in N.Y. on Thursday, taking its initial lead from softer retail sales data, and a modest miss in initial jobless claims. Treasury yields slipped lower as did equities, weighing on the greenback generally. Heating up of tensions in Iraq likely spooked Wall Street to a degree, with Obama saying all options remain on the table with regards to help the beleaguered country. Read more
