Special Reports

G10 performance versus dollar for the past month reveals interesting insights

Posted on November 24, 2015 at 3:33 pm GMT

The US dollar has performed very strongly during the past month and this is of course reflected across many different pairs in the FX market. Not all currencies have been weak to the same extent versus the greenback although nearly all posted significant losses. European currencies lead the pack in terms of losses as the Swiss Franc, the Norwegian and Danish Krone and the euro lost more than 4%. Particularly the euro has been hurt by ECB promises of easier [..]

Stocks up, commodities down and the effects on currency markets

Posted on November 20, 2015 at 2:57 pm GMT

Some analysts have pointed to an interesting dichotomy during the past few days. One the one hand, risk assets such as stocks, have been rallying and the S&P 500 is not far from its all-time high. On the other hand, commodities and particularly metals and energy, are hitting multi-year lows because of a slowdown in global growth and particularly demand from emerging markets. In theory, healthy economic growth should lead both commodities and stocks to move higher. Therefore it can [..]

US dollar pushes euro and gold near multi-month lows

Posted on November 17, 2015 at 3:20 pm GMT

The US dollar has been moving higher this week as it pushed both the euro and gold near multi-month lows. Specifically the euro dipped to its lowest since April below 1.0650 and very near its 12 ½ year low of 1.0461 registered back in March this year. With respect to gold, the precious metal fell to its lowest in nearly 4 months at 1077, after falling to 1074 the previous week; eyeing the almost 6-year low of 1071 dollars an [..]

Positioning may be a problem for dollar bulls for remainder of year; oil eyes August low

Posted on November 13, 2015 at 2:06 pm GMT

Euro – dollar has been under intense pressure in recent weeks after it was unveiled that the Federal Reserve was planning to raise interest rates during its December meeting, while the European Central Bank was planning to add to its stimulus measures in the same month. Specifically, the euro came tumbling down from its 1.1494 peak (not far from its high for the year) in mid-October to below the 1.07 level on November 10th. During this period, Fed Governors have [..]

Central bank meetings lift some of the fog heading into year-end

Posted on October 30, 2015 at 12:14 pm GMT

The meetings of the European Central Bank, the Federal Reserve and the Bank of Japan during the past couple of weeks have managed to clear up some of the uncertainty regarding the next steps in monetary policy from the world’s major central banks. Firstly, starting with the ECB which met the previous week, one should expect some sort of extension or expansion of its current Quantitative Easing program during the next meeting in December and possibly a lowering of the [..]

Key central bank meetings – especially the Fed’s – to have big FX impact

Posted on October 27, 2015 at 4:18 pm GMT

The meeting of the Federal Reserve’s rate-setting committee on Wednesday as well as the Bank of Japan’s on Friday could have major implications for foreign exchange markets. It should be pointed out of course that neither central bank is expected to act according to the majority of analysts. Regarding the Fed, it is clearer that no move is anticipated, whereas for the Bank of Japan, the odds of something happening are higher. Turning attention to the Fed, the ‘will they [..]

Investment themes: Draghi stimulus promise hits euro, helps risk assets rebound

Posted on October 23, 2015 at 4:17 pm GMT

The news that the ECB would reexamine its stimulus program at its meeting on December 3 – as well as consider cutting rates further into negative territory – came as a surprise to markets this week. This had a profound influence on various financial instruments, but it remains to be seen whether the medium- or long-term picture will be altered by such a move by the ECB. Prior to this week’s meeting, a consensus was forming that questioned whether the [..]

Investment themes: ‘Goldilocks’ data helps markets to stabilize

Posted on October 20, 2015 at 4:17 pm GMT

Following intense turmoil during August and September, financial markets seemed to have stabilized since the end of September. Since a low on September 29, the US stock index benchmark, the S&P 500, has rallied 8.4% by October 20th – an impressive rally. Emerging markets and other risk assets have also managed to post substantial gains. This environment has also led to less demand for safe havens such as the Japanese yen, which stayed very close to the 119 handle against [..]

Investment themes: US dollar weakens but keeps within ranges

Posted on October 16, 2015 at 4:15 pm GMT

The US dollar index fell to its lowest in around 7 weeks during the past few sessions, as the evidence in favor of the Fed keeping rates unchanged this year started to gather. The latest bad news for the US economy came from the September retail sales report, which showed consumption weak. This will probably negatively affect third quarter GDP growth and could give the Fed reason to pause for a think rather than go ahead and hike rates. Before [..]

Investment themes: Commodity currencies on rollercoaster ride; British pound under pressure

Posted on October 13, 2015 at 4:14 pm GMT

Commodity currencies are exhibiting relatively high volatility these days as the news about the Chinese economic slowdown, the Federal Reserve, the US dollar as well as specific commodities such as crude oil, ebb and flow leading to significant price swings. For the Australian dollar for example, heavy selling drove down the currency from around 74 cents against the US dollar just before the middle of August, to a 6-year low of 0.6906. A rebound in commodities and in risk sentiment [..]

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