Analysis Topic: Currency Market Analysis
The analysis published under this topic are as follows.
Thursday, June 07, 2012
What's Next for the U.S. Dollar? QE3? / Currencies / US Dollar
By: Axel_Merk
The dismal U.S. jobs report for May, released last Friday, caused the price of gold to soar as the market appears to be pricing in an ever-greater chance of "QE3" - another round of quantitative easing by the Federal Reserve (Fed). But given that 10-year government debt is already down at 1.5%, the Fed may dive deeper into its toolbox in an effort to jumpstart the economy. Investors may want to consider taking advantage of the recent U.S. dollar rally to diversify out of the greenback ahead of QE3.
Wednesday, June 06, 2012
Reasons Why the U.S. Dollar is Really Rising / Currencies / US Dollar
By: Money_Morning
Keith Fitz-Gerald writes:
By all accounts, the U.S. dollar should be the functional equivalent of a Zimbabwean bill.
The Fed has pumped trillions into the worldwide financial system as part of misguided stimulus efforts that should be incredibly inflationary.
Yet, instead of a disastrous repeat of the Weimar Republic, the U.S. dollar has strengthened considerably.
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Friday, June 01, 2012
China and Japan Abandon U.S. Dollar as a Means of Trade / Currencies / US Dollar
By: Julian_DW_Phillips
In the next month China and Japan (China's main trading partner) will no longer use the U.S. dollar as the only currency in trade with each other. They will use the Yuan and the Yen directly with each other. This will see the dollar removed from a large chunk of the world's trade -in itself, not a very large percentage, but a significant one. It's the start of a trend that is set to grow. We've no doubt that China is tailoring its trade with all its trading partners to use the dollar only so far as it is required to deal with the U.S. and other dollar-dependent nations. Oil from Russia utilizes the Yuan and Rouble, and Australia has arranged a similar deal.
Friday, May 25, 2012
Euro to Surge / Currencies / Euro
By: Zeal_LLC
The fortunes of Europe’s beleaguered euro currency have been heavily influencing US markets. Both stocks and commodities have been battered down recently by overwhelming euro bearishness. This has proven seriously vexing for traders trying to focus on fundamentals. But the extreme euro pessimism worrying everyone is actually very bullish. This loathed, oversold currency is due to surge again.
Friday, May 25, 2012
Euro/Swiss Franc Exchange Rate Technical Update / Currencies / Euro
By: Dr_Volkmar_G_Hable
As most investor are aware the Swiss National Bank put a floor of 1.20 CHF into the exchange rate in September 2011 and has stated on a couple of occasions that it will do everything to defend that level. The move was necessary in order to stop the free fall of the Euro against the CHF. Speculators trying to push it since then have been quickly caught by the Swiss National Bank since then.
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Thursday, May 24, 2012
German Economic Locomotive Being Dragged Down, Euro's Cyclical Path / Currencies / Euro
By: Ashraf_Laidi
More evidence of the German locomotive dragged down by the rest of the European continent as German manufacturing PMI dips to 45.0, its lowest figure since May 2009. The French version of manufacturing PMI hit 44, also a 36-month low. EURUSD hits a fresh low on the year at $1.25, down 3.3% year-to-date, and down 7.0% from its February highs. Our warning that the PMIs were a more effective leading indicator than the IFO or ZEW was first made in March, stating the reasons in more detail.
Monday, May 21, 2012
Fiat Currency Collapse Dynamics / Currencies / Fiat Currency
By: Alasdair_Macleod
The reason we accept paper money as a store of value is habit. This habit has its origins in history, when banks took our gold as deposit and issued paper receipts for it. The gold has gone, but the paper with its habitual value remains, and we accept it without question. The only backing is a vague government promise.
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Tuesday, May 08, 2012
Greece Will Leave Euro this Summer / Currencies / Euro
By: Bloomberg
John Taylor, founder of the world's largest currency hedge fund FX Concepts, spoke with Bloomberg TV's Erik Schatzker and Sara Eisen and said that Greece will leave the euro this year. He went on to say that, "this summer I think is very likely...the Europeans aren't going to give them money, the IMF's not going to give them an OK. They will be out of money in June."
Saturday, May 05, 2012
U.S. Dollar and Gold Have Eyes on Europe / Currencies / Forex Trading
By: J_W_Jones
Friday saw heavy selling pressure coming into risk assets, specifically equities and oil. However, the real driving force behind the selling pressure is likely the result of several unrelated economic/geopolitical events. Clearly the unemployment report had an impact on price action, but strangely enough it would appear to those more in tune with reality that market participants want lower prices so that the next quantitative easing program can be initiated.
Monday, April 30, 2012
Is the US Killing the Euro? / Currencies / Euro
By: Dr_Volkmar_G_Hable
In 2004 for the first time it was reported that criminals were shunning US-Dollars in favor of Euros. Near Acapulco (Mexico) on Wednesday, December 8th, 2004, two armed men hijacked a bus threatening to blow it up with explosives unless their demands were met, one of which being a ransom payment of two million Euros (LA Times, 11th December 2004, p7). Obviously, the actions of these hijackers are deplorable, but it demonstrated a turning point for the Euro and just how great the disdain for the United States Dollar has been. Even hijackers shun US Dollars. The reason for such behavior can be found in the chart below:
Thursday, April 26, 2012
The Fed and their Influence on Gold and the US Dollar, Behind The Curve! / Currencies / US Dollar
By: UnpuncturedCycle
I am not surprised to see that the Federal Reserve on Wednesday stood pat on interest rates and said economic growth will remain moderate over coming quarters and then only pick up gradually. The decision to make no changes was expected. Economists think the Fed will wait for more data before deciding how to proceed next. Recent data, such as the monthly jobs report from the Labor Department, point to a slowing pace of economic growth. In a statement, the Fed announced that it will leave its target range for its federal-funds rate unchanged at 0 to 0.25% — as it has for every meeting since December 2008. The central bank also did not change the forecast that “exceptionally low rates” will be here until late 2014. Richmond Fed President Jeffrey Lacker cast the lone dissent, continuing a trend at all three meetings this year. Lacker, one of the more hawkish regional Fed presidents, has argued against the 2014 rate forecast.
Thursday, April 26, 2012
So Long to the U.S. Dollar / Currencies / US Dollar
By: Marin_Katusa
Marin Katusa, Casey Research writes: There's a major shift under way, one the US mainstream media has left largely untouched even though it will send the United States into an economic maelstrom and dramatically reduce the country's importance in the world: the demise of the US dollar as the world's reserve currency.
For decades the US dollar has been absolutely dominant in international trade, especially in the oil markets. This role has created immense demand for US dollars, and that international demand constitutes a huge part of the dollar's valuation. Not only did the global-currency role add massive value to the dollar, it also created an almost endless pool of demand for US Treasuries as countries around the world sought to maintain stores of petrodollars. The availability of all this credit, denominated in a dollar supported by nothing less than the entirety of global trade, enabled the American federal government to borrow without limit and spend with abandon.
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Thursday, April 26, 2012
Epic Money Battle Between U.S. Dollar and Gold / Currencies / Fiat Currency
By: Jim_Willie_CB
The so-called Global Financial Crisis is a term so widely used that it has earned its own acronym of GFC. When first seen, it seemed like girl friend club or some such, since many friends use GF loosely to refer to sweethearts. The GFC is falsely named, since it is more accurately described as a global monetary war with the USGovt vigorously defending its franchise in the USDollar for crude oil and trade settlement, and for bank reserves management. Take either away, and the other departs quickly, leaving the United States vulnerable to a quick ticket to the Third World marred by price inflation and supply shortage, even isolation in ring fences. On its own devices, the US is in as bad shape as the worst of the PIGS nations. The USGovt debt is above 100% of GDP finally. The annual deficit of $1.5 trillion could not be financed in normal methods. So the USFed is the adopted buyer of last resort, purchasing over 80% of new and recycled US debt issuance. The Interest Rate Swap tool acts like a hydraulic howitzer, in pushing down the long-term interest rates by creating false artificial demand. Without the IRSwap contract, a Morgan Stanley specialty, the US interest rates would be 6% to 7% just like Spain and Italy. The USTreasury Bond is not a safe haven, but rather a place where Weimar printing press operations persist, where decisions like SWIFT code rules are enforced like a illicit weapon, where billboards are painted to attract embattled investors of impaired toxic sovereign bonds from Southern Europe to retreat to the supposed safe haven of USTBonds.
Tuesday, April 24, 2012
Natural Money / Currencies / Fiat Currency
By: Christopher_Quigley
The Story of Robinson Crusoe and guest: "If there were a monetary system on this island and I, as a shipwrecked traveller needed a
loan, I should have to apply to a money-lender for money to buy the things which you have
just lent me without interest. But a money-lender has not to worry about rats moths, rust
and roof-repairing, so I could not have taken up the position towards him that I have taken
up towards you. The loss inseparable from the ownership of goods is born, not by money-lenders, but by those who have to store the goods. The money-lender is free from such cares and is unmoved by the ingenious arguments that found the joints in your armour. You did not nail up your chest of buckskins when I refused to pay interest; the nature of your
capital made you willing to continue the negotiations. Not so the money-capitalist; he would
bang the door of his strong room before my face if I announced that I would pay no
interest. Yet I do not need the money itself, I need it only to buy buckskins."
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Monday, April 23, 2012
Is There No Escape from the Euro? / Currencies / Euro
By: Philipp_Bagus
As I discussed recently, the costs and risks of maintaining the eurozone system are already immense and rising. So is an exit possible? Intuitively, the exit from the euro should be as easy as the entrance. Joining and leaving the club should be equally simple. Leaving is just undoing what was done before. Indeed, many popular articles discuss the prospects of an exit of countries such as Greece or Germany.[1] However, other voices have rightly argued that there are important exit problems. Some authors even argue that these problems would make an exit from the euro virtually impossible. Thus, Eichengreen (2010) states, "The decision to join the euro area is effectively irreversible." Similarly, Porter (2010) argues that the large costs of an exit would make it highly unlikely. In the following we address the alleged exit problems.
Wednesday, April 18, 2012
France May be the Domino that Causes the Euro to Collapse / Currencies / Eurozone Debt Crisis
By: Money_Morning
Martin Hutchinson writes:
Commentators are wringing their hands again, worried the troubles in Spain could cause the whole euro project to collapse.
As a result, all eyes are now on Spanish 10-year debt yields, which went above 6% last week as the threat of euro-chaos returned.
But it's not Spain the markets should be worried about.
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Wednesday, April 11, 2012
The Fed's Currency Swap Covert Bailout of the Eurozone / Currencies / Credit Crisis Bailouts
By: Philipp_Bagus
On Tuesday, March 26, 2012, I was invited by Ron Paul and his staff to assist a meeting of the Domestic Monetary Policy and Technology Subcommittee of the House Committee on Financial Services. The title of the hearing was "Federal Reserve Aid to the Eurozone: Its Impact on the U.S. and the Dollar."
Unfortunately, Ben Bernanke had not come to the hearing, being busy with propaganda lectures in favor of the Fed. Instead, two of his colleagues, Mr. William C. Dudley (president and chief executive officer, Federal Reserve Bank of New York) and Dr. Steven B. Kamin (director, Division of International Finance, Board of Governors of the Federal Reserve System), showed up to answer the committee's questions on currency swaps with other central banks.
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Tuesday, April 10, 2012
The U.S. Dollar Remains the Preferred Choice of Official Foreign Exchange Reserves / Currencies / US Dollar
By: Asha_Bangalore
The IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) database continues to indicate that dollar remains the preferred reserve currency. In the fourth quarter of 2011, the dollar made up 62.1% of official reserves vs. 61.8% in the third quarter. The dollar accounted for 61.4% of official reserves in 2011 vs. 61.8% in 2010 and 62% in 2009.
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Friday, April 06, 2012
The Reserve Fiat Currency Triffin Dilemma Will Create a 3-G World / Currencies / Fiat Currency
By: Richard_Mills
Trade imbalances - deficits and surpluses - between nations are one of the major reasons for financial crises. Countries become trapped in a vicious spiral - they accumulate debt because they are sustaining a trade deficit, the bigger their debt grows year after year, the harder it becomes to generate a trade surplus.
Wednesday, April 04, 2012
Emerging Markets Look to Drop BRICS on U.S. Dollar / Currencies / US Dollar
By: Eric_McWhinnie
On Friday, gold prices increased $17.10 per ounce while silver gained 49 cents. Despite volatile trading for the precious metals, both logged positive gains for the first quarter of 2012. Gold climbed about 6.5 percent and silver surged 16 percent. Both metals continue to receive support as countries around the world weigh financial fears. Reports of a new emerging market bank are highlighting concerns about troubled currencies.
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