Gold sold off, and US yields rose as we anticipated, but this did little for the greenback, which fell against all the majors but the Japanese yen and New Zealand dollar. Although the US dollar fell to new six-month lows against the Canadian dollar and rose to three-week highs against the yen, it remained mostly …
Will Sideways Movement Alleviate the Overextended Greenback? Read More »
The US dollar did not recover as much ahead of the jobs as we flagged a week ago, and the technical condition is still stretched. The price action lends credence to our view that a technical consolidative/corrective phase is at hand. Further near-term dollar recovery looks likely but does not change our longer-term bearish outlook. Dollar …
The dollar was beaten up in July. It fell against nearly all the world’s currencies except for a handful of emerging market currencies, including the Argentine peso and Turkish lira. It did not just fall against the major currencies, but it fell hard. The euro’s 5.0% gain in July was its best monthly performance since …
The US dollar fell against all the major currencies last week and reached the lowest level against the euro since October 2018. The five-week slump in the Dollar Index is the longest since late 2017/early 2018. Although we were early dollar bears, the downside momentum appears stronger than the momentum indicators suggested last week. Even …
The US dollar was mixed last week. Sentiment appears tilted against it, but it is has not convincingly broken down. The euro continues to flirt with the $1.14 area and the Australian dollar has stalled near $0.7000. There does appear to be a more favorable reassessment of Europe and this is born out in several …
Ranges may Fray, but Do You Play for the Breakout? Read More »
Overview: Equities began the week on a firm note in the Asia Pacific region. The Nikkei gained more than 2%, and the profit-taking seen in China ahead of the weekend was a one-day phenomenon. The Shanghai Composite rose 1.8%, and the Shenzhen Composite surged 3.5%. Taiwan and South Korea markets also rallied more than 1%. …
A surge in virus cases and record fatalities in several US states dampened the animal spirits at the end of last week. However, few seem emotionally or materially prepared to resist the official efforts to generate favorable financial conditions to facilitate an economic recovery. Most seem to be expecting more policy support to be forthcoming. …
Bearish Case for Dollar Thickens, but Bulls are Tough to Find Read More »
The consolidative/corrective phase in the capital markets appears to be drawing to a close. The June PMI readings confirm a significant improvement is underway and that many high-income economies are on track to return to positive growth in Q3. At the same time, the extent of government and central bank support is unprecedented. The dollar …
Are We on the Cusp of New Leg up in Risk Assets? Read More »
We anticipated and have been tracking the corrective or consolidative phase in the foreign exchange market since shortly after the unexpected surge in US non-farm payrolls reported on June 5. That phase may not be over yet, and the quarter-end adjustments are a wildcard. Many expect large equity sales after strong rallies that were all …
Caution as Last Part of Corrective Phase could be the most Impulsive Read More »
After a run-up in risk assets from the middle of May, broad consolidation was the main feature of the capital markets last week. Markets were calmer. The three-month implied volatility of all the major currencies fell, led by the usually high-beta dollar bloc. The VIX, which measures the volatility of the S&P 500 snapped a …