How Does the Fannie / Freddie Announcement Impact the FX Market?
This weekend, the US government announced that they have seized control of Fannie Mae and Freddie Mac, also known as the Government Sponsored Enterprises (GSEs). The sharp rally in the Asian and European stock markets as well as the move in Dow futures suggest that we will see similar strength in US stocks. [...]
Non-farm Payrolls Falls -84K, Unemployment Rate Hits 5 Year High, Revisions Are Ugly!
There is no question that the US labor market is deteriorating. Non-farm payrolls fell by -84k last month, driving the unemployment rate to a 5 yeer high of 6.1 percent. However what made FX traders really sell the dollar was the jump in the unemployment rate and the revisions. The US government [...]
What is Behind the Dollar’s Rally After the US Close?
The US dollar skyrocketed after the NY close and the driver is only one thing - risk aversion.
Volatility has ripped through the financial markets with the Dow Jones Industrial Average plunging 344 points and the US dollar surging to a year to date high against the Euro. With the exception of the dollar’s [...]
Why Non-Farm Payrolls Could Top -100k
On Friday, we are expecting the number one most market moving release for the US dollar - August Non-farm payrolls. Based upon the leading indicators for NFP, there is a decent chance that job losses could have topped 100k last month.
I wrote this special report for GFT. You can catch my [...]
Why the ECB is Still Hawkish
ECB President Trichet’s lack of commitment towards future monetary policy has led to little volatility in the Euro. After leaving interest rates unchanged at 4.25 percent, Trichet explicitly said that he has “no bias.”
However based upon the number of times he used the words “price stability in his Introductory [...]
What is the Risk for the ECB? UK Firms Go On Fire Sale
In yesterday’s Daily Currency Focus, we said that the 1.45 level was significant support in the EUR/USD.A break below that level would have opened the door for a move down to 1.42. Even though the EUR/USD did take out the support to hit an intraday low of 1.4385, what [...]
Hurricane Premium Off the Table, What is the Impact on Growth
With Hurricane Gustav being downgraded to a tropical depression, the Hurricane Premium is off the table. Oil prices have plunged more than $10 a barrel since Friday with $100 a barrel now within striking distance. The rally in the US dollar is a direct result of the fall in oil prices. Since [...]
Can the US Dollar Continue to Rally Even if the US Economy Slows?
The US dollar has been quietly trended higher since the European trading session.The EUR/USD hit a high of 1.4768 shortly after the London open but ended the US session near its daily lows.Although this strength was also seen against many of the other major currencies, the dollar failed to rally against the Japanese Yen.This weakness [...]
What Drove the US Dollar to a 6 Month High?
The troubles in the US financial sector continue to be the biggest stories of the day, driving the US dollar to a 6 month high against the Euro. The parallel moves in both the greenback and the Japanese Yen indicate that we are seeing another bout of risk aversion. Yesterday, the story was [...]
Crude Crushes the Dollar
Here is a quick note on this morning’s price action that I published on GFT’s Research page
Oil prices are above $120 a barrel on geopolitical tensions and fears that Tropical Storm Fay will make landfall for the third time, which is an extremely rare occurrence.
The correlation between crude prices and the US Dollar [...]
