Browse by Tags

Daily Pfennig

Blog Subscription Form

  • Email Notifications
    Go

Archives

  • Interest rate differentials drive the currency markets...

    In This Issue.

    * Interest rate differentials steer the markets...

    * European inflation picks up...

    * Brazil uses taxes to control the real...

    * Carry trade pushes commodity currencies higher...

    ...
  • Game off for risk trades...

    In This Issue..

    * Dollar hits 3 month high...
    * Norges bank raises .25%...
    * Fed repeats call to keep rates low...
    * Inflation in India rises...

    Good day...And welcome to Thursday. Chuck started his Christmas vacation, so I have the honor of bringing you the daily missive for the next week or so. The dollar continued to gain strength throughout the day as investors waited on news from the FOMC. Overnight, Greece sustained another rate cut, this time by S&P, which caused investors to move back toward the 'safety' of the US$. The news caused the dollar to rally to a 3 month high vs. the Euro and post gains across the board. The currency markets are becoming a bit volatile again, and much of this volatility can be linked back to the return of a transaction which dominated currency markets over the past decade....
  • Good news for housing is bad news for the dollar...

    In This Issue..

    * Home sales increase most in eight years...
    * Euro boosted by confidence...
    * Geitner sells the Chinese...
    * Carry trades back in vogue...

    The dollar lost more ground on Monday, but the reasons were different than those that caused last week's slow decline. Currency traders sold the dollar after a report showed sales of new homes rose the most in eight years. New-home sales in the US climbed 11% last month to a 384,000 annual pace. This was substantially higher than economists had forecast, and the most since November. The report also showed the number of houses on the market dropped to the lowest level in more than a decade. The housing numbers seem to confirm that the housing market may be approaching a bottom, but housing prices continue to fall, and more data is needed before I'm convinced the worst is over. Many of these homes have been sold to first time homebuyers taking advantage of government programs; and if unemployment continues to climb, housing sales are not likely to rise quickly....
  • Carry trades unwind...

    In This Issue..

    * Carry trades unwind...
    * Euro zone GDP falls...
    * Will TIC flows be enough??
    * Aussie dollar predicted to outperform...

    Good day...Chuck handed me the Pfennig this morning, as I took an early flight home yesterday and he got back to St. Louis much later than I did. The Las Vegas Money Show went well, as Chuck packed the presentation rooms with investors looking to learn more about investing in Gold and currencies. Attendance seemed like it was down a bit, but we stayed busy at the booth with investors looking for diversification. We also got to see a number of 'old friends' who stopped by the booth to say hi. All in all it was a good three days, but as always, it is good to get home and back into the routine.

    The currency markets fell back into their established routine also, as fear drove investors out of riskier assets and back into the US$. We saw a general reversal of the carry trade, with the Japanese yen the only major currency which appreciated vs. the US$. As Chuck pointed out last week, investors feeling more confident about the global economy, dusted off their carry trades which had made them good money over the past few years. But traders are still a bit skittish, and move back out of these leveraged trades at the first sign of trouble in the global economy....
  • Fighting Inflation...

    * CPI increases... * Eurozone inflation increases too! * G-8 lets currencies slip by... * TIC Flows data today... **Fighting Inflation... Good day... And a Marvelous Monday to you! I hope you had a grand Father's Day... Mine was fabulous! And a great weather day too! Cards take 2 of 3 from the Phillies after getting royally spanked on Friday night! UGH! And I got to see my first ever Polo game on Saturday! I've seen 100's of water polo games, as son Andrew was a good player in High School, but never a Polo game on horses... Absolutely cool! OK... Friday was not a good day in the currencies as once again the dollar took the hammer and swung a mighty swing. The euro spent the day in the 1.53 handle, as more and more talk about the Fed fighting inflation took hold of the markets. I'm still resisting this rhetoric by the Fed, and believe that eventually the markets will come to the realization that the Fed is simply "talking the talk" and are unwilling to "walk the walk"......
  • The Fed Throws Us To The Inflation Wolves...

    * Dollar rally continues... * A Big Time Challenge... * An Iceland note... * Carry Trades still have life!...
  • He's Back....

    * Eurozone inflation jumps higher! * U. of M. Consumer Sentiment falls again! * Unwinding Carry Trades.... * Another Fed error?...