currencies

The US dollar is narrowly mixed against major and emerging market currencies. Comments by House Speaker Boehner that he will form a majority bloc to avoid a default by the Federal government is being understood two ways.

Safe assets are in short supply. If the US government shuts down for a long time, there will be a flight to quality. And the lack of safe assets will support the Treasury market.

To put it mildly, the Fed’s dovish surprise has many implications for the market. The first is that the Fed is very concerned about the backup in US rates, and the negative impact on the economy. - The second major implication is that…

Abenomics has been very successful in goosing the Japanese economy thus far. However, the question remains whether this success will be short-lived or durable. I believe it is likely to be short-lived because of the policy constraints that…

Bank Indonesia has fallen far behind the curve in its currency management tactics. After fairly steady intervention kept USD/IDR trading near the 10,000 area from May through early August, the authorities have been allowing the pair to move…

The X-axis is the change in the spot currencies against the dollar since late May. The Y-axis is the change in the local 5-year debt. It is a useful way to conceptualize what has happened from a total return perspective. Korea, Czech,…

The dollar is broadly higher against the major currencies, with the Swedish krona and euro suffering the most. Poor retail sales in Sweden and unexpected weakness in the German labor market report (unemployment rose 7k vs the consensus…

This is beginning to sound like a broken record, but India's currency has come under severe pressure - again. India's central bank, the RBI, seems to have completely lost control over the rupee. The currency broke through 67 to the dollar…

The problem in a nutshell is that the U.S. is the world's reserve currency. And so, other countries are forced to adhere to Fed dictates in a liquidity crisis because everyone is hoarding dollars, trying to maintain their supply of…

If you look at the last two posts on this site from Marc Chandler and from Sober Look the connection between Fed tapering and money flows is clear. Hot money is flowing out of emerging markets and into Europe.