The dollar fell versus most of the major currencies on speculation the U.S. economic recovery is slowing. We can see evidence of this in recent US macroeconomic indicators….
Below You May Find The Technical Video…
Archive for May, 2011
In March, I wondered aloud about whether the New Zealand Dollar might be the most overvalued currency in the world. Since then, it has continued its unlikely ascent, rising 10% on a correlation-weighted basis and 3% against the US Dollar, hitting a 26-year high in the process. While there are signs that the New Zealand economy might be able to withstand an expensive currency, at some point, the chickens must come back to roost.
Surely the expensive kiwi must be wreaking havoc on the New Zealand dollar?
WASHINGTON (MarketWatch) — Dominique Strauss-Kahn, the former managing director of the International Monetary Fund, will receive a one-time severance payment of $250,000, the international finance agency said Friday. “Former Managing Director Strauss-Kahn’s annual pension and related entitlements have been grossly over-estimated in media reports this week, and appear based erroneously on a one-off separation payment of $250,000,” the IMF statement said. “The annual payments would be far, far less than that amount in subsequent years.” Strauss-Kahn resigned late Wednesday following his recent arrest in New York on sexual-assault charges.
On a correlation-weighted basis, the Japanese Yen has been one of the world’s weakest performing currencies in 2011. Alas, while this information is interesting for theoretical purposes, it is of little concern to traders, who focus instead on individual pairs. Against the dollar (USDJPY), the Japanese yen is still quite strong, having recovered most of the losses inflicted upon it by the coordinated G7 intervention in March. Does the yen deserve such a lofty valuation? No. <
From the May 4 top near $1.4950, the EUR/USD has fallen as low as $1.4050 on May 16.
In other words, the dollar has gained 9 full cents on the euro in less than two weeks. That’s a huge move, and people want explanations. And what the media offers boils down to “risk aversion,” in light of “the bad news from Greece.” And that sounds good — until you check the timeline.
The latest wave of trouble in Europe started on May 3, when Portugal asked for a bailout. If you think that event is what pushed forex traders towards “risk aversion” — think again. The euro happily gained against the U.S. dollar the follow Full post…
Currency strategists at Danske Bank claim that although the single currency was under strong pressure during the past month, future dynamic of the currency markets will be determined primarily by the interest rate differential that are in favor of euro versus the greenback.
The specialists think that the European authorities won’t support the idea of early Greek debt restructuring and this will help to constrain investors’ concerns. In addition, according to Danske, Greece’s debt problems won’t keep the ECB from lifting up the interest rates. Danske expects the next hike to come in July. As for
Last week, I was preparing to write a post about how the British pound was overvalued and due for a correction, but was sidetracked by a series of interviews (the second of which – with Caxton FX – incidentally also hinted at this notion). Alas, the markets beat me to the bunch, and the pound has since fallen more than 3% against the dollar- the sharpest decline in more than six months. Moreover, I think there is a distinct possibility that the pound will continue to fall.
Not much has changed since the last time I wrote about the pound. If
NEW YORK (MarketWatch) — The Federal Reserve Bank of New York bought $1.44 billion of inflation-indexed Treasury debt on Monday as part of a program that is the centerpiece of the Fed’s loose monetary policy. Dealers offered the Fed $8.55 billion in Treasury Inflation protected Securities, or TIPS, maturing from 2013 through 2041. Treasury prices stayed under slight pressure after the buyback. Yields on 10-year notes /quotes/comstock/31*!ust10y UST10Y -0.13% , which move inversely to prices, rose 1 basis point to 3.19%.
Analysts at Royal Bank of Canada note that Canadian dollar weakened versus US dollar as the data released yesterday showed that US crude oil inventories reached the 2-year maximum making oil price decline, stocks fall and demand for higher-yielding assets shrink. Crude supply in the United States, Canada’s major trading partner, surged during the week before May 6 by 3.78 million barrels to 370.3 million.
Trading against the single currency loonie gained on speculation Greece may restructure its debt while Canada’s economy grows stronger. Can
NEW YORK (MarketWatch) — The Federal Reserve Bank of New York, the branch carrying out the central bank’s quantitative easing purchases, said Wednesday it will buy $93 billion in Treasury debt over the next month, starting Thursday. That will include about $80 billion in the so-called QE and $13 billion in reinvestments of proceeds from maturing mortgage-related holdings. The next buyback schedule will be released on June 10. After the announcement, Treasury prices extended gains slightly. Yields on 10-year notes /quotes/comstock/31*!ust10y UST10Y +1.27% , which move inversely to prices, fell 5 basis points to 3.17%.