Latest Posts

  • The Calm Before the Storm

    Jul 31, 2008 / 4:00pm / in Americas, Economics, General, News Releases, United States Dollar, Forex News

    Tomorrow is the one for all the marbles. The single most important economic announcement for the USD takes place tomorrow: Non-Farm Payrolls (NFPs). Despite today’s very important announcement of US GDP for Q2, the EUR/USD essentially stood pat around 1.56. What is special about NFPs is that, unlike announcements such as rate decisions or GDP results, predicting the outcome is often like finding a needle in a haystack. The unpredictability of this announcement, coupled with its importance, generally make it the largest “market-moving” announcement for the USD.

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  • Recent USD Rally… Why?

    Jul 23, 2008 / 4:37pm / in Economics, General, Oil, Patterns, United States Dollar, Forex News

    With mixed news coming out of the world’s remaining superpower in recent weeks, the recent US dollar rally induced widespread befuddlement. With Europe suddenly looking economically worse-off than America, it is easy to understand why the USD has rallied against the EUR. However, the USD has rallied against many of the major currencies, including the JPY and the CHF. In other words, it is not only bad news coming out of the Euro-Zone that is fueling this USD rally. So, the important question is what exactly is causing this rally?

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  • Game Time!

    Jun 24, 2008 / 4:14pm / in Fundamental, General, Interest Rates, News Releases, United States Dollar, Forex News

    As I have explained before, there are some days when there is little of note in the FOREX world, so I get the chance to research a random economy somewhere in the world. Today (and I’m sure tomorrow) is not such a day. Everyone’s favorite superpower, the United States of America, came out with important economic data today, and will have even more important data tomorrow. US Consumer Confidence was lower then expected, and the lowest it has been since 1992.

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  • Big Week Ahead!

    Jun 23, 2008 / 9:28am / in Fundamental, General, Interest Rates, United States Dollar, Western Europe, Forex News

    In some weeks, the news highlight in the FOREX world is an Italian report on car sales. Other weeks, the major headline is that Nigerian workers are striking against the oil companies. However, this week, there’s plenty to be excited about, especially the most important gathering since the meeting of the Five Families: the U.S. Federal Reserve Open Market Committee Meeting.

    Ladies and Gentlemen, start your engines.

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  • US Dollar - Predicting the Future (Part 2!)

    Jun 16, 2008 / 12:25pm / in Americas, Currency, Fundamental, Interest Rates, Oil, United States Dollar, Forex News

    Last week I mentioned that though the G8 conference would impact the US dollar in the short term, the ultimate fate of the USD will ultimately be determined more by Bernanke than by anyone else. The Group of Eight’s meeting has come and gone, offering little good news for the USD. In the FOREX market, that “little good news” led to bad news for the USD, as the greenback surrendered some of the territory it had gained last week. So with the conference in the rear-view mirror… let’s look ahead.

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  • Fundamental Analysis and Central Bank Resources

    Jun 13, 2008 / 10:32am / in Forex Trading, Fundamental, United States Dollar, Forex News

    Fundamental analysis can be daunting, but this is what drives the market. I don’t care how many doji’s or buy signals Deutche Bank saw on the eve of the Russian Debt default.

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  • Carry Trade Coming Back?

    Aug 23, 2007 / 8:31am / in Carry Trading, Interest Rates, Japanese Yen, United States Dollar, Forex News

    Financial markets look to be rebounding after their huge drops in the last couple of weeks. Markets have seen an uptick in value and, and recent news only seems to support that trend. The primary effects of this movement on the foreign exchange market have been twofold: providing the Fed with justification to slow down the easing process and giving Mrs. Watananbe the ability to resume the carry trade.

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  • US Sneezes

    Aug 22, 2007 / 6:27am / in Economics, Interest Rates, United States Dollar, Forex News

    Yesterday, we wrote that when the US sneezes, the rest of the world still gets a cold.  Now there are reports from DailFX.com comparing the Asian financial crisis of 1997-98 to the US subprime fiasco.  But while the starting points may be similar, there is reason to believe the reactions by international central banks will be different.

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  • Discount Rate Cut Just Window Dressing

    Aug 21, 2007 / 7:24am / in Interest Rates, United States Dollar, Forex News

    Yesterday, we stated that there would be little empirical effect of the discount rate cut on the international credit crunch.  Until the Fed actually cuts the Fed Funds rate (and that will not happen until September at the earliest), markets around the world are going to continue to be wary.  The equities markets are sending mixed signals about the health of the financial economy.  But the real signal is the credit markets because that is the epicenter of the crisis.  And it is there that we see the negligible effect of the Fed’s dec

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  • Effect of the Discount Rate Cut

    Aug 20, 2007 / 8:47am / in Interest Rates, United States Dollar, Forex News

    The Fed cut the discount rate from 6.25% to 5.75% before trading opened Friday morning, and US stocks responded.  Green numbers showed up for the first time in weeks.  The Nikkei rebounded from its shocking fall on Friday.  But it is impossible to tell right now if the cut will provide a lasting calm to financial markets worldwide.

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