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Interview with Edward Hugh (Part 2): The Dollar's Demise is Vastly Overstated
From Forex Blog, 2 year ago, Read 0 times. Similar articles
Today, we bring you an interview (the second part, and complete transcript) with Edward Hugh, a macro economist, who specializes in growth and productivity theory, demographic processes and their impact on macro performance, and the underlying dynamics of migration flows. Edward is based in Barcelona, and is currently engaged in research into the impact of aging, longevity, fertility and migration on economic growth. He is a regular contributor to a number of economics blogs, including India...
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Making Sense of the Yen: Forex Intervention, Debt and Deflation
From Forex Blog, 2 year ago, Read 0 times. Similar articles
Last 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 to contradict himself repeatedly within days of assuming his new post.
On January 6, he said it would be “nice” to see the Yen weaken, going...
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Chinese RMB Set to Appreciate in 2010
From Forex Blog, 2 year ago, Read 0 times. Similar articles
The 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 stasis should come to an end soon. The only questions are when, how and to what extent.
In hindsight, the Central Bank (i.e. state economic...
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The Dollar in 2010
From Forex Blog, 2 year ago, Read 0 times. Similar articles
I 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 can be ascertained and comprehended.
December (I know I said I wouldn’t look backwards, but come on, a little context is necessary here…) was the best month for the Dollar in 2009. From...
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Forex in 2009: A Year in Review
From Forex Blog, 2 year ago, Read 0 times. Similar articles
In some ways, 2009 was a wild year in forex markets. Compared to 2008, however, it was relatively tame. And that is all I have to say about forex in 2009.
Ah, if only it were that simple…
The year began as a continuation of 2008. Global capital markets were still in the throes of the credit crisis, and risk aversion was in vogue. Investors continued to remove funds en masse from virtually every economy – with an emphasis on emerging markets – and parked the proceeds in the US....
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Korean Won Headed Up, Despite Unwinding of Carry Trade
From Forex Blog, 2 year ago, Read 0 times. Similar articles
The Korean Won is up 32% since March, and 8.2% on the year. At the same time, it is 20% below is 2007 year-end level, as well as 13% weaker than the 2006 average of 955 and 15.5% weaker than the 2007 average.
Focusing only on the Won’s appreciation would probably cause some technical analysts to back off, while comparing it only to the highs of a couple years ago would lead others to pile in, without knowing examining other indicators. In my opinion, this is a situation in which...
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Pause in Rate Hikes Threatens AUD
From Forex Blog, 2 year ago, Read 0 times. Similar articles
In October, the Reserve Bank of Australia (RBA) became the first industrialized Central Bank to raise interest rates. It followed this up with two additional hikes in November and December, bringing its benchmark rate to the current level of 3.75%, by far the highest among major currencies.
This series of rate hikes caught (forex) markets completely off guard, and investors moved quickly to price the changes into securities and exchange rates. The Australian Dollar initially spiked more than 7%...
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?Logic' Returns to the Forex Markets, Benefiting the Dollar
From Forex Blog, 2 year ago, Read 0 times. Similar articles
Many analysts are pointing to Friday, December 4, as the day that logic returned to the forex markets. On that day, the scheduled release of US non-farm payrolls indicated a drop in the unemployment rate and shocked investors. This was noteworthy in and of itself (because it suggests that the recession is already fading), but also because of the way it was digested by investors; for the first time in perhaps over a year, positive news was accompanied by a rise in the Dollar. Perhaps the word...
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Indian Rupee's Rise is Sustainable
From Forex Blog, 2 year ago, Read 0 times. Similar articles
While the Indian Rupee has risen more than 10%, since bottoming in March, it has increased only 4.3% in value in the year-to-date. Still, given how turbulent the first few months of 2009 were (a continuation of 2008, really), this modest appreciation was actually the third highest, among Asian currencies, behind only the Indonesian Rupiah and Korean Won.
For those of you that don’t regularly follow the Rupee (to be fair, I probably fall into this category), it has basically ebbed and...
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Fears of Sovereign Debt Default Enter the Forex Fray
From Forex Blog, 2 year ago, Read 0 times. Similar articles
As if forex traders didn’t have enough to worry about these days, now there is a new concern- that of sovereign debt default. The last couple months have witnessed a spate of minor episodes, all of which paint a picture of frightening cohesiveness about the state of sovereign finances, and the ability of countries to continue to finance and service their debt. As the economic recession moves into recovery (or at least, permanently distances itself from the prospect of depression), the...
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Canadian Dollar Headed for Parity
From Forex Blog, 2 year ago, Read 0 times. Similar articles
Only 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 the record decline that it suffered in 2008. As a result, the Loonie is now only pennies away from returning to parity.
The Loonie’s rise can be ascribed to a...
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