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South African Rand Loses its Luster
January 28, 2010In 2009, the South African Rand was the world’s second best performing currency, after only the Brazilian Real. Since September, however, it has stagnated, and over the next year, it is projected to fall 10%. What happened?! The Rand represents an interesting case study because it sits at the nexus of several trends. The first [...]
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SNB: Intervention Back on the Table
January 26, 2010Pull up a 1-year chart of the Euro against the Swiss Franc, and you’ll quickly notice a salient trend: the exchange rate has hovered slightly above ‘
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Gold and the Euro? I thought it was Gold and the Dollar?!
January 24, 2010Let me preface this post, by noting that I try to avoid writing about gold, since there are some many other excellent analysts out there writing about the subject. But when there is a such a strong overlap between gold and forex markets, well, I just can’t resist! Recently, gold prices have collapsed at virtually [...]
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New CFTC Forex Regulations Unpopular, but Worthwhile
January 22, 2010I try not to editorialize much when writing this blog. There are too many talking heads as it is, which is why I try not to interject own opinions into the facts. Admittedly, the notion of facts in forex is obviously a bit murky, but I stand by my approach, nonetheless. Today, I would like [...]
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Dollar Carry Trade: Not Dead Yet
January 20, 2010After the impressive rally in the US Dollar at the end of 2009, many market observers predicted that the end was near for the Dollar carry trade. That’s because volatility is the sworn enemy of carry traders; whenever there transpires a sudden change in direction in a funding currency, investors will usually race for the [...]
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Forex Reserves in Transition: Is the Euro Making a Run?
January 17, 2010With so much to think about these days, I havn’t spent much time poring over foreign exchange reserve statistics. Apparently, this is to my detriment, as there have been a number of important developments on this front, some of which carry far-reaching forex implications. I’m guessing a lot of you are probably in the same [...]
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Canadian Dollar Headed for Parity
January 15, 2010Only a year ago, who could have conceived of such a possibility? At the time, the Canadian Dollar (aka Loonie) was in the doldrums, as a result of the credit crunch and concomitant collapse in commodity prices. In March, however, the Loonie began an extraordinary rally, and finished the year up 16%, almost perfectly offsetting [...]
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Making Sense of the Yen: Forex Intervention, Debt and Deflation
January 14, 2010Last week, Hirohisa Fujii resigned as finance minister of Japan. Since Fujii was an outspoken commentator on the Japanese Yen, the move sent a jolt through forex markets. Those who were expecting that his replacement, Deputy Prime Minister Naoto Kan, would be be more consistent than his predecessor were quickly disappointed, as Mr. Kan managed [...]
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Chinese RMB Set to Appreciate in 2010
January 9, 2010The Chinese Yuan (RMB) spent all of 2009 pegged to the Dollar at 6.83. Since the Dollar depreciated against almost every other currency during that time period, the Yuan has fallen against these currencies, undoing most of its appreciation in 2008. As a result of both international pressure and internal economic conditions, however, the Yuan’s [...]
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The Dollar in 2010
January 7, 2010I thought it would be fitting to follow up my last post (Forex in 2009: A Year in Review), with one that looked forward. And what better way to do that then by squarely examining the US Dollar, which is still the undisputed heavyweight champion of forex markets, and from which most other forex trends [...]