The EUR has struggled since the ECB meeting last week, despite a surprise removal of an easing bias. It has failed to benefit much from a fall in the USD against most currencies in a risk-on move following the US labor data. Eurozone economic momentum has eased in recent surveys, and this is reflected in […]
The ECB removed a key element of its easing bias. That was a statement that they were prepared to expand its asset purchase plan if the outlook deteriorated. Specifically, the removed sentence was: “If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path […]
Trump trade policy confuses an already muddled FX market. The loud howls from near and far decrying the Trump tariffs may be contributing to an already negative global investor view of the USD. However, most ways you slice it, Trump’s tariffs and broader economic nationalist policies should support the USD, particularly against EM and commodity […]
The tariff fallout was surprisingly more towards a weaker USD. While this may reveal still underlying bearishness for the USD, other currencies, including EUR and AUD, appear to be more at risk than the USD. USD/JPY may be finding a base after testing significant support near 105. The Fed has turned somewhat more hawkish, the […]
The USD testing key resistance after a double bottom. Higher US yields and shaky equity markets lending the USD support. Powell acknowledged the outlook for the US economy is brighter. Emerging market currencies and equities wobble more than most in US trading. Powell testimony suggests risks are skewed towards faster pace of hikes. US […]
There is a significant degree of USD weakness that has been unrelated to the relative improvement in its yield advantage, whether that be short or long term yields, real or nominal. This has made it hard to predict USD exchange rates, generating uncertainty and a pervasive bearishness towards the USD that is hard to shake. […]
The tepid recovery in the USD, in spite of higher US yields and improving economic outlook, raises the question – is the market becoming spooked by the worsening US fiscal outlook. Normally the market would not question the US Treasuries capacity to borrow. And it may be considered heretical to see the USD as other […]
In our report last week, (Bond yields in driver’s seat; time for correction in equities and the USD; 31-Jan – AmpGFXcapital.com), we anticipated rising US yields spilling over to a correction in global equities and the USD. The recovery in the USD has been modest so far, but it may be a creeper as the […]
The rise in bond yields may have moved into a phase which is self-sustaining, at least for a while, triggering a period of volatility and consolidation in global equities, if not a more significant correction. The fall in the USD over the last year has appeared increasingly correlated with rising global equities, diverging significantly from […]
This won’t necessarily sound ground-breaking for many market observers, but the weak USD reflects the bull market in global equities. Interest rate differentials are playing a very limited role in the FX market, less so than they have for a long time. The divergence between interest rate spreads and many currencies’ exchange rate to the […]