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  • Confidence sends the dollar lower...

    In This Issue..

    * Confidence sends the dollar lower...
    * Good data for the US boosts Mexico and Canada...
    * The Fed exits stage left...
    * Pound rallies, but don't be fooled...

    Good day, only two more days left in March, and April brings Chuck back to the desk. The dollar bears returned to the markets yesterday as most every currency moved higher versus the dollar.

    Confident investors kept the dollar on the run yesterday as they went shopping for yield. The commodity currencies ruled the day again, with Australia, Norway, and Brazil's currencies all posting gains nearing 1.5% vs. the US$. Greece successfully sold 5 billion euros worth of bonds in the first sale since the EU reached agreement on a stability plan. The sale emboldened investors who moved funds out of their 'safe haven' parking spots in the Japanese yen and US dollar. It seems we are back to the risk on / risk off trading pattern which dominated the currency markets over the past year. Good news for the US or global economy means bad news for the safe havens of the US$ and yen, while the opposite occurs whenever the global recovery is called into question....
  • Dollar falls as US consumer confidence increases...

    In This Issue..

    * Dollar falls as US consumers become more positive...
    * GDP to be reported this morning...
    * European confidence increases...
    * Mexican peso recovers...

    Good day... Hopefully this will reach everyone today. We have been having some computer problems causing some major delays in the delivery of your Pfennig. As Chuck always says, if you need your Pfennig, just go to www.dailypfennig.com where it is posted each morning as soon as I hit the send button. For those of you who feel the need, the website also has an archive, so you can all read what I had to say yesterday. But enough about our email problems, you all want to know what is happening in the markets.

    The dollar began the day trading in a fairly tight range, but a fairly large jump in US consumer confidence sent the US$ tumbling. Yes, the old 'opposite' trading pattern has begun again. When we have good news regarding the US and global economies, the US$ gets sold. But when the data is bad, the dollar is purchased as a safe haven. Yesterday both pieces of data released in the US were more positive than most economists expected, so the dollar gave back some of its recent 'safe haven' gains....
  • US$ benefits from the swine flu...

    In This Issue..

    * Swine flu causes rush to US$...
    * The US$ wins no matter what??
    * US Treasury starts a busy week...
    * Chinese Renminbi moves back up..

    Good day... And welcome to another week. Chuck headed off to Bermuda on Saturday, so you are all stuck with me for the whole week. Both he and Frank will be giving presentations at the Sovereign Society's Total Wealth Symposium; Frank representing EverBank and Chuck representing his paid newsletter, Currency Capitalist (www.worldcurrencywatch.com). Frank and Chuck probably log more miles than anyone else in the company, and while it may sound like fun to travel to all of the exotic locals, travel is tough. And with the big news over the weekend, airplanes and airports are the last place I would want to be right now....
  • It's Not My Fault, It Must Be Yours!

    * What's $78 Billion among friends? * Currencies fade with bias to buy Gold... * Could the Carry Trade Unwind be done? * U.S. soccer beats Mexico... ** It's Not My Fault, It Must Be Yours! Good day... And a Thunderin' Thursday to you! Well... Front and center this morning, I'm going to tell you something that will surprise a few and make a few happy. I've had my say on the Bailouts, TARP, Stimulus, and spending. I've beaten them to a pulp, and some readers have expressed their contempt with me carrying on with this beating. So... Unless something cracks, I'll just leave it all as it stands, and go on with life. This all has been too much for my blood pressure to take! I'll report the facts on this stuff, and leave the commentary for people that think they "know better"... For instance, it was reported the other day that the Treasury Dept. has overpaid for stock received from TARP recipients by $78 Billion. You see, for every $100 given in TARP, the Treasury was to receive $100 in stock / assets, but when all the beans are counted, the Treasury is $78 Billion short on stock /assets... But, what the heck, what's $78 Billion among friends?...
  • Comfortably Numb...

    * Comfortably numb... * Data confirms the US slowdown... * NZD and AUD end the week with gains... * Hungarian forint stabilizes... ** Comfortably numb... Good day...These dramatic swings in the markets are becoming so common place that a move of 400 pts by the Dow doesn't really garner much notice. After all, in the past five days, the Dow Jones average has had a trading range of almost 2,000 points, but after five dramatic days the stock market is trading almost exactly where it was a week ago. And the volatility in the equity markets has carried over to the currency markets, where we continued the roller coaster ride which began a few weeks ago. Yesterday, the dollar began the day with a strong move up in early European trading. But a plethora of bad data released here in the US caused the greenback to reverse course, and it wiped out all of its earlier gains. But the bargain hunting rally in the stock market during the afternoon pulled the dollar along with it, and we ended the day with a dollar index which was slightly higher than the day before. Today is shaping up to be a similar trading pattern, as Europe has begun the day buying dollars vs. most of the major currencies....
  • Falling Short On Financing...

    * Dollar wages war on euro! * TICs comes up short... * An Oil discussion... * Mexico raises interest rates... ** Falling Short On Financing... Good day... And a Marvelous Monday to you! This week is shaping up to be much like a college fraternity pledge "hell week", as we will be as thin as a razor swim suit, with many people out... All I can ask of World Markets customers is that they be patient when calling this week, the wait could be long. OK... Friday saw some ups and downs but all-in-all a range bound day for the currencies. I'm not going to stick my foot in my mouth again and say that it looks like the euro has applied a tourniquet to the bleeding, like I did last week! I'll simply say that it held 1.47, and has added to that in the overnight trading....
  • Don't be fooled by the US GDP...

    * Don't be fooled by the US GDP... * Canada, Mexico, and Brazil rally... * Aussie dollar falls... * Japanese to keep rates unchanged... ** Don't be fooled by the US GDP... Good day...And welcome to the last day of July. The dollar held its ground through most of the trading day but started to sell off as the day wound down. The currency markets seem to be stuck in a summer doldrums, with few dramatic moves. With many of the head traders enjoying a summer break (ours included), currency desks are reluctant to take on large positions. And who can blame them as the recent global economic data has left investors wondering where to turn. As I have explained to several recent callers, the global economy is experiencing a slowdown as the high commodity prices and a slumping US economy has hurt growth. The economic releases have shown an overall slowdown in growth, and rising global inflation. But the overall slowdown will have differing effects on the currencies. Asia is slowing, but a slowdown from double digit growth in China and India is much different than a slowdown in the US where growth is around 2%. Also, the Asian countries have kept interest rates low to try and keep their currencies from appreciating too quickly. These countries are therefore in a much better position to combat inflation, and can allow currency appreciation to help combat rising prices....