A research note today from Societe Generale found that, despite claims from senior US officials, the USD has generally weakened against other major currencies over the last two decades. This announcement comes after a press conference on Saturday, where US Treasury Secretary Steve Mnuchin argued that by not intervening to support the yuan, the Chinese […]
Lizzy Birmingham provides a brief roundup of the major FX moves this week, and the drivers behind each. 1) Euro Climbs Following Draghi’s Rate Hike Delay On Thursday, the euro climbed 0.6%, reaching a seven-week high of $1.1290 against the USD. This increase in value came following ECB President Mario Draghi’s announcement that the ECB […]
Lizzy Birmingham provides a brief roundup of the major FX moves this week, and the drivers behind each. 1) US Economy on “Recession Watch” says Morgan Stanley This Tuesday, chief US equity strategist at Morgan Stanley, Michael Wilson, warned investors of a possible upcoming US recession. In a note to clients, using recent data highlighting […]
Lizzy Birmingham provides a brief roundup of the major FX moves this week, and the drivers behind each. 1) GBP Plummets Amid Uncertainty The British pound has hit a four month low. The continued drop in value has been caused by opposing parties failing to create Brexit deal and the looming resignation of Prime Minister […]
Welcome to 2019 – may it be a happy and successful 12 months for you all.
The nice stuff out of the way, let’s revert to type – and talk about the prospects for destruction of the euro.
I have read quite a bit over the past two weeks about how the euro enters it’s 20th year on shaky ground and while I don’t actually agree with the analysis, or the fact that the euro may implode in the coming five years, one has to say there are issues bubbling away that may present challenges to the EU as it seeks to reach the drinking age in most US states in one piece.
In this week’s podcast Colin Lambert and Galen Stops tackle two big stories in the FX market: the recent flash crash in the Asia markets and the changes at Citi’s FX prime brokerage (FXPB) business.Both Lambert and Stops express skepticism that the news regarding Apple’s profits in China was the cause of the flash crash, although the former is equally unsure about an alternative theory put forward by the latter to explain the price moves. Both agree though that the event was symptomatic of changes in the nature of liquidity in the FX market, and note a disparity between what many market participants will say in private and in public on this matter.
The minutes from the European Central Bank’s latest monetary policy meeting reveal anxieties about nations manipulating their currencies for competitive gain.
According to the ECB minutes, which were released today, “A number of remarks were made about recent exchange rate developments.”
It was noted in the minutes that while the euro exchange rate is not a target of ECB policy, movements in the exchange rate are deemed important insofar as they can affect the outlook for growth and inflation in the euro area.
It’s not often one can turn to Italian philosopher George Santayana to offer some direction for the foreign exchange market, but I feel on this occasion it is justified, because George nailed it.
There is so much noise at the moment around currency manipulation (of the “official” kind I hasten to add, not the “private” that has provided so much grief for the FX industry over the past four years) that anyone might think it’s a relatively new phenomenon. It’s not.
The European Central Bank (ECB) has decided to hold interest rates steady, with market participants predicting further euro weakness.
At today’s meeting, the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40%, respectively.
The Governing Council says that it expects the key ECB interest rates to remain at present or lower levels for an extended period of time.
Yesterday’s referendum decision in Italy to reject changes to the Italian constitution, and the subsequent offer to resign on the part of Italian Prime Minister, Matteo Renzi, could spell trouble for the future of the euro, warn economic strategists.
Profit & Loss reported yesterday that the euro was under pressure following the referendum decision, but on Monday it recovered. Despite this, Jason Leinwand, co-founder and CEO of FirstLine FX, thinks that the currency is overvalued given the potential political threats in Europe.