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  • Dollar rally peters out...

    In This Issue..

    * Dollar rally peters out...
    * Obama defends his policies...
    * Commodity currencies should outperform...
    * Global Power Shift Index...

    Good day... And happy Thursday to everyone! Hope everyone made it through the 'hump day' with no worries. We started the morning here with rainshowers, but it ended up being a beautiful afternoon and evening. Currency markets were similar to the weather here, as most currencies started Wednesday in the loss column vs. the US$, but rallied as the day progressed. The dollar had strengthened over the past couple of days due to 'safe haven' demand; but a surprisingly strong durable goods number (ex autos) combined with an 'all clear' signal from President Barack Obama had investors moving back into riskier assets. The commodity based currencies also got a boost as China signaled it would maintain an accommodative policy, easing speculation that the Bank of China would try to rein in bank lending. Lots to cover today, so lets get right to it....
  • A broken record...

    In This Issue..

    * Mixed bag of housing numbers...
    * Foundation work...
    * High yielders...
    * Commodity currencies again...

    Good day...and a Terrific Thursday to you. As Chris mentioned yesterday, I'll be steering the ship for the next couple of days while both he and Chuck are out so I look forward to being your relief captain. The fall like weather in the middle of summer has continued yet for another day in St. Louis, not that I'm complaining, but that out of the ordinary trend certainly hasn't carried over to the currency markets. In fact, I could probably cut and paste yesterday's Pfennig and you wouldn't miss a thing as the currencies traded in a very tight range, so there wasn't much exciting to report on...Oh well, instead of wasting space, I'll get right to it......
  • So Far... It's A Turn Around Tuesday!

    In This Issue..

    * Currencies bounce back...
    * Commodities and Commodity Currencies get hit hard!
    * China's recovery a myth?
    * Devaluation in the dollar's future?

    Good day... And a Terrific Tuesday to you! It's too hot in the hot tub! You can't make me get in the hot tub! Ahhh... When I walk outside and my eye glasses fog up from the heat and humidity, I think of that old Saturday Night skit, with Eddie Murphy playing James Brown!

    OK... Well, yesterday we saw the currencies stop the bleeding from the overnight sell off, and although they range traded on the day, the bias was to sell dollars once again. That bias has played through on our Turn Around Tuesday theme, and the currencies are higher today than yesterday, but lower than they were 3-weeks ago week ago. Yes, the month of June has not been kind to the currencies, as some of the euphoria that was going on from March thru May, regarding the global economic recovery is being thought about again, and this time, not with the same rose colored glasses......
  • ECB rate decision looms...

    In This Issue..

    * ECB rate decision looms...
    * China pushes for a bigger seat at G20...
    * Declining global reserves hurt US Treasuries...
    * Commodity currencies come back...

    Good day... The dollar held on to its gains through out most of the day yesterday, as investors continued to look for a parking place in the volatile markets. But late in the day, the sentiment changed and the dollar started getting sold vs. most of the currencies. This dollar weakness continued overnight with the Euro gaining back 1 cent to trade back above 1.33 and the commodity based currencies of Norway, New Zealand, Australia, and South Africa all gaining over 1 percent vs. the greenback.

    What caused this sharp turn around? I had to look hard to find anything which set this reversal in motion, and could only find references to the upcoming ECB rate decision due on Thursday. The euro had come under selling pressure the past few days as currency traders bet the ECB would be cutting rates by 50 basis points on Thursday. This cut would, of course, narrow the yield advantage the Euro holds over the US$ and therefore make it less attractive to investors. There were also many who believed the ECB should follow the path of the US, UK, and Japan and begin using quantitative easing to further force down rates....