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  • ‘For Much Longer’...

    In This Issue..

    * Aussie PM resigns!
    * Aussie mining tax is dead!
    * New Home Sales plummet 33%!
    * Fed is not so "cocky" any longer...

    Good day... And a Tub Thumpin' Thursday to you! It's Tub Thumpin' because of some good, no great news from Australia overnight! It certainly isn't because of the Housing data that printed yesterday! And the Fed isn't so 'cocky' about the economy suddenly... Hmmm... These things and more, as we explore our Tub Thumpin' Thursday, so let's go!

    Front and Center this morning, Julia Gillard became Australia's first female prime minister after Kevin Rudd stepped aside as leader of the governing Labor Party, paving the way for the government to drop a controversial new 40% levy on mining profits that has damaged its standing in voter polls.

    ...
  • FOMC Day – 06/23/2010...

    In This Issue..

    * A tight trading range day...
    * High yielders underperform...
    * Franc at all-time high VS euro...
    * Gold gets back on rally tracks...

    Good day... And a Wonderful Wednesday to you! It's also a BIG DAY for the U.S. Men's soccer team... Yes, I know they call it football in all corners of the world but here... Our Soccer legend, Ty Keough, calls the U.S. version of football, 'the gridiron'! Any way, it's a Big Day for the Men's team... Win and they are assured of moving on.

    Yesterday, after the currencies had sold off in the overnight sessions, they traded throughout the U.S. session in a tight range, with a bias to move higher, but not being able to mount any kind of sustained move against the dollar....
  • The Fed Keeps The "Extended Period" Wording...

    In This Issue..

    * Spain gets downgraded...
    * Fed keeps rates unchanged...
    * Interest rate differentials are back in play!
    * RBNZ keeps rates unchanged...

    Good day...And a Tub Thumpin' Thursday to you! What a great evening of jazz music last night, with my little buddy having two guitar solos in two of the 4 songs played...

    Well... No amount of soothing words from Germany was going to stop the tailspin of the euro yesterday, after S&P downgraded Spain's debt now... It's a European debt pandemic according to the people selling the euro like funnel cakes at a State Fair.

    The Euro states have to feel like they are getting treated like a red headed stepchild... (Ok, it's just a saying folks) by the ratings agencies... The PIIGS (Portugal, Italy, Ireland, Greece and Spain) are falling like dominoes that were all lined up......
  • FOMC keeps rates low...

    In This Issue..

    * FOMC keeps rates low...
    * Carry trade is back on...
    * Senators try to legislate a higher renminbi...
    * An Irish toast...

    Top of the mornin to ye... Happy St. Patrick's Day to all of the Irish readers, and all of those who are Irish for the day! Both Chuck and I have pretty deep Irish roots, and St. Patrick's Day is always one of our favorites. Chuck will be spending the day enjoying baseball in the sunshine of Florida; and I will be heading to Florida myself later today. Speaking of which, I have to catch a plane in a couple of hours, so I better get going on today's Pfennig.

    ...
  • Exceptionally Low For An Extended Period...

    In This Issue..

    * Old Trading Theme rises up again...
    * Currencies sell off then rebound overnight...
    * U.S. New Homes Sales Decline...
    * It's somebody's birthday today!

    Good day... And a Tub Thumpin' Thursday to you! Yes, it's me... I thought it best to cancel my San Antonio trip, so Jen can get to Florida to be with her family. This is the second time that I've backed out of speaking engagement with this private group, I sure hope they don't think I'm avoiding them!

    Front and Center this morning... It's Chris Gaffney's Birthday! So... This will be the 'Chris Gaffney Birthday Edition of the Pfennig'! Chris is 10 years younger than me, so yesterday when he said 'I'm an old man now' I about fell out of my chair! He's not even 50! Oh well...

    For Chris' Birthday, I'm going to buy him lunch, and... Talk briefly about the State of the Union Address, only to the extent of how it affected the currencies, and the FOMC statement yesterday, and other things... Just for Chris' Birthday! HA!...
  • Thin trading brings tight ranges...

    In This Issue..

    * Thin trading brings tight ranges...
    * Searching for the exits...
    * Mixed data in Europe...
    * Yen and Real make strange bedfellows...

    Good day...We had a pretty quiet 24 hours in the currency markets, with the majors all trading in a very narrow band vs. the US$. We will probably have a few more of these days during the next two weeks, as currency desks are manned by the backups and trading thins out. Many of the institutional investors will be moving to cash in order to preserve gains for their year end statements, and individual investors will have the holidays to take them away from the markets. Occasionally we will get a rogue piece of economic data which shoves the market one way or the other, but we typically won't see any long term positions being put on during the last two weeks of the year....
  • 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....
  • Green Light, Green Light!

    In This Issue..

    * FOMC minutes make it a Risk On Day!
    * Gold hits $1,180!
    * Germany's ZEW is bang on with their forecast!
    * Russia to buy loonies?

    It's a Risk On Day, full on, no 'kind of' today! Or at least that's how it looks as I begin to write this morning... The Big Dog, euro, is back over 1.50 this morning, and Gold is trading at $1,177! What brought about this full on Risk On day?

    Well... It was the Fed's FOMC meeting minutes... And, when I read what the Fed Heads had to say, I had one song in my mind... Hey! You! Get off of my cloud! Because that's where their collective heads are with these minutes, folks... The Fed Heads viewed the U.S. economy on firmer footing and expects the growth to continue in the 4th QTR... Yeah, right, and I've got some swamp land I'd like to sell you! Snake Oil salesmen these guys!

    Any way... The Fed Heads also said that the dollar's depreciation had been 'orderly'... With no mention of doing anything to stop the depreciation! Green light, Green light, Green light... How many of these Green lights do traders and you need to realize that the Fed isn't going to stop the dollar's decline? And How about the Treasury? Oh! That's right, they're too busy shoving negative yields down people's throats! OK, I'm getting all ticked off, and I really don't feel like doing that today, so I'm going to talk about something else, fast!...
  • Santa rally for the currencies...

    * A Santa Rally for the currencies?... * Waiting for the FOMC... * AUD and NZD rally... * China to try and keep growth above 8%... ** Santa rally for the currencies... Good day...It was actually a Great day for the currencies yesterday as the dollar index dropped another full point. The Euro moved past $1.35 and then blew through $1.36 to end the day over $1.37. And the Euro wasn't even the best performer, as the New Zealand dollar rallied over 2.1% vs. the US$ to take the title of best performing currency against the greenback. The South African rand was the only currency turning in a negative performance yesterday with the other commodity driven currencies of Norway and Brazil just barely holding their ground vs. the US$....
  • Waiting on the FOMC meeting...

    * FOMC to cut further... * Bernanke turns his back on inflation... * Kiwi and Australia rally... * Gold continues to shine... ** Waiting on the FOMC meeting... Good day...and welcome to another week, hopefully the currency markets can continue their assault on the dollar which began a few weeks ago. The dollar index peaked back on November 21, and with the exception of a few days around the beginning of December, the greenback has consistently fallen vs. most of the major currencies. Friday was no exception, and the dollar continued to give back gains over the weekend with the Euro climbing back over $1.35 for the first time in two months....
  • Heading Towards Zero...

    * Fed cuts rates 50 BPS! * Currencies rally Big! * 3rd QTR GDP to go negative? * I.O.U.S.A. ** Heading Towards Zero... Good day... And a Tub Thumpin' Thursday to you! It certainly was a Tub Thumpin' Wednesday for the currencies, foreign stocks, commodities, and the Philadelphia Phillies! This by no means that the deep dense fog that has hung over the markets for 3 months has lifted for good... It did, however, lift for one day, and what a day it was! Oh, and the Fed did indeedly do cut their Fed Funds rate to 1%, which works out great since Fed Funds had been trading at 1% anyway! I had a reported from Dow Jones call me a few minutes after the rate cut and ask me my opinion on what the dollar was doing, which at the time was rallying back a bit... I said it looked like a classic case of buy the rumor sell the fact, that enough speculators were pushing the dollar lower ahead of the rate cut in hopes that a larger cut would be made. That, however, was not the case, and the dollar rallied... But only for about 20 minutes, and then it took a rid on the slippery slope, with the euro pushing to the 1.29 handle as I left for the day....
  • A Currency Bounce...

    * U.S. stocks soar! * Currencies rally! * Consumer Confidence at an all-time low! * Getting off the bench! ** A Currency Bounce... Good day... And a Wonderful Wednesday to you! The fall chill has really set in here as witnessed by my need to throw on a jacket and my Missouri Tigers baseball cap each morning! When you are basically bald like me, the cold air is not a friend to you, thus the need for a baseball cap from now until late spring! Well... The trading theme remained in place yesterday, but this time it was reversed. For those of you new to class, or any of you who have been playing horse hooky, the trading theme that has gripped the markets since August is: The deeper, darker, and more dangerous the U.S. economy and financial meltdown, including the credit market's locked status, the dollar gets bought... If there is any sign of light to all this mess, the dollar gets sold, for whenever the markets get their minds off the mess, they are reminded of awful fundamentals for the dollar....
  • FOMC Meeting Begins Today...

    * Mini-currency rally is cut short * Is it Japan or U.S.? * Gold stages a rally... * Swiss francs remain well bid... ** FOMC Meeting Begins Today... Good day... And a Terrific Tuesday to you! Well... We saw some profit taking in the currencies yesterday, which meant a mini-rally in non-dollar currencies for the first time in what seems to be a month of Sundays! At one point in the day, the euro had added more than 1-cent to its figure dragging sterling, Swiss, Canada and a host of others along. But, that didn't last in the overnight markets, and we're right smack dab back on square one where we left off yesterday. This morning we'll listen in on former Fed Chairman Volcker's speech, which ought to be a good one, don't you think? I mean, this is the guy that said a couple of years ago that the U.S. could see a currency crisis... And didn't it? OK, it's not now, but turn your clocks back to June, and you'll see what I'm talking about here. Volcker is a "hero" of mine in how he took on the inflation of the late 70's early 80's and didn't dance around the dance floor with it... He whipped it into shape, and then left it all in good shape for Big Al Greenspan... We all know what happened after that!...
  • Fed not as hawkish as expected...

    * Fed not as hawkish as expected... * Markets now turn to ECB and BOE... * Canadian dollar slides... * Aussie hit by 1-2 punch.. ** Fed not as hawkish as expected... Good day...I want to start off today's Pfennig by apologizing for those of you who were waiting to receive their Pfennig yesterday. I sent it off at the normal time, but we had some problems with the program which sends it out, so it was delayed in getting delivered. You can always view the current Pfennig at www.dailypfennig.com where we post it first thing in the morning. That website also has archived versions of past pfennigs for your reading pleasure! They tell me the problem has been fixed, so you should get this pfennig right on time. The dollar drifted higher throughout most of the day yesterday as the markets prepared for the FOMC rate announcement. The sentiment driving the dollar higher was that the Fed would sound much more hawkish in order to keep an overall consensus among the FOMC members. Dollar bulls were expecting a signal from Bernanke that an increase in interest rates would be just around the corner. These higher interest rate expectations encouraged traders to take the dollar index back up to just under 74, a level we haven't seen in almost two months....
  • Dollar swings a mighty hammer...

    * Dollar swings a mighty hammer... * FOMC expected to sound more hawkish... * Euro Opportunity currencies rally... * RAB leaves rates unchanged, but AUD$ falls... ** Dollar swings a mighty hammer... Good day...The dollar rallied again yesterday, and shot up even more overnight as the markets prepare for the rate announcement from the Fed. Falling oil prices helped propel the greenback higher, as oil fell below $120 a barrel for the first time since May. This latest move puts the dollar index close to 74, the point at which the last dollar correction ended back in mid June. The technical guys are all waiting to see if the index can break through 74.31, a sign that further strength is possible. But I don't pretend to be a technical analyst and would much rather look at the economic fundamentals to figure the direction of the dollar....