Marc Chandler

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Marc Chandler
About the author:

Head of Global Currency Strategy at Brown Brothers Harriman.

Post-Yellen, Trading Incentives to Resume Next Week

Date: 25 August 2016

The US dollar remains mostly within the ranges seen yesterday against the major currencies. The market awaits fresh trading incentives and the end of the summer lull, which is expected next week.  The Jackson Hole Fed gathering at which Yellen speaks tomorrow is seen as the highlight of this quiet week.

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Arguing Against Kocherlakota's Argument

Date: 24 August 2016

Kocherlakota was a dove when he was at the Fed and remains dovish.  He is concerned that the US economic performance is, as he says, not what it seems.  By this, he means it is weaker than the GDP figures suggest.  He acknowledges the US has grown faster than the other high-income economies.  He dismisses it because the US population has also grown faster, but the participation rate has not.

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Can the Yellen Build-up be Too Much?

Date: 24 August 2016

The US dollar is going nowhere fast.  It is narrowly mixed against the major currencies.  The market waits for fresh trading incentives, with much hope placed on Yellen's presentation at Jackson Hole at the end of the week.  Is it too early to suggest that the build-up ahead of it is too much? 

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Eurozone PMI Mixed while Markets are Still Waiting on Yellen

Date: 23 August 2016

The most interesting data today was the flash Eurozone PMI.  The aggregate reading was little changed.  The manufacturing PMI slipped to 51.8 in August from 52.0 in July.  The service PMI firmed to 53.1 from 52.9.  The composite ticked up to 53.3 from 53.2, which is the highest since January.

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Team Dudley Includes Fischer

Date: 22 August 2016

Last week, some market participants were giving more credence to what seemed like dovish FOMC minutes than to NY Fed President Dudley's remarks that accused investors of complacency over the outlook for rates.  Yesterday, Vice-Chairman of the Federal Reserve Fischer seemed to echo Dudley's sentiment, and this has underpinned the dollar and is the major spur of today's price action.

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The Dollar, What to Watch For, and Jackson Hole

Date: 22 August 2016

The US dollar lost ground against nearly all the major currencies last week. The sole exceptions were the Australian dollar, where pressure ahead of the weekend following Moody's decision to cut the outlook for five Australian banks wiped out the previous small gain, and the Norwegian krone, which was really flat with less than a 0.1% loss.

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CFTC: Oil and 10-Year Treasury Hot Spots

Date: 22 August 2016

Summer doldrums continue to depress speculative activity in the currency futures market.  In the CFTC Commitment of Traders reporting week ending August 16 speculators made small adjustments to gross currency positions.  There was only one change more than 6k contracts.

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After a Rough Week, the Dollar Finds a Footing

Date: 19 August 2016

The US dollar is trading firmly ahead of the weekend as part of this week's losses are recouped. The gains are sufficient to put it higher for the week against the Australian dollar.  If its gains against the Aussie were sustained, it would be only the second weekly gain since the end of May.

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Maybe Wage Inflation is the Answer?

Date: 18 August 2016

All that is solid is melting.  After Copernicus, we know that earth is not the center of Creation.  Darwin showed us that humans are part of the animal kingdom.  Freud told us we are not even masters of our own house.

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Choosing between Dudley's Comments and the FOMC Minutes

Date: 18 August 2016

It is not a good day for the US dollar.  It is being sold across the board.  The seemingly dovish FOMC minutes released late yesterday appears to have gotten the ball rolling.  The takeaway for many was that any officials wanted more time to assess the data at the July meeting.

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The Down Under Dollar is Making a Move

Date: 17 August 2016

Since late July, I have been looking for the Australian dollar to turn lower.  Instead, the Aussie has continued to climb.  It has risen in ten of the past eleven weeks.  As this Great Graphic, created on Bloomberg, these gains have brought the Australian dollar toward a three-year downtrend line drawn off the April 2013 and the June-July highs from 2014.

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Relaxing Financial Controls the Chinese Way

Date: 17 August 2016

It is as if Hamlet, the confused prince of Denmark, has taken up residence in Beijing.  The famed-prince wrestled with "seeming" and "being".  So are Chinese officials.  They seem to be relaxing their control financial markets, but are they really?  Are they tolerating market forces because they approve what they are doing, such as driving interest rates down or weakening the yuan?  If so what happens when the markets do something for which they don’t approve?

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Fed President Dudley Upbeat on H2 U.S. Growth

Date: 17 August 2016

The US dollar is enjoying a mid-week bounce against all the major currencies.  It appears that participants in Asia and Europe are giving more credence to NY Fed Dudley's comments yesterday. Although many in the market have given up on a rate hike this year, Dudley reaffirmed his belief that the economy was accelerating in H2 and that the market was being too complacent.

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Forex Participants Watch the JPY100.00 Level

Date: 16 August 2016

This Great Graphic was created on Bloomberg.  I use it to illustrate a possible head and shoulder pattern that has been carved by the US dollar against the yen.  Head and shoulders patterns are most often regarded as a reversal pattern.

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Are Shifting Views on Fed Policy Moving the Dollar?

Date: 16 August 2016

The US dollar is being sold across the board today.  The US Dollar Index is off 0.65% late in the European morning, which, if sustained, would make it the largest drop in two weeks.  The proximate cause being cited by participants and the media is weak US data that is prompting a Fed re-think.

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The Lure of a New Gold Standard

Date: 15 August 2016

Today is anniversary of the final blow to the dollar-gold standard.  By August 15, 1971, the exchange of dollars for gold was limited to central banks, and US President Nixon unilaterally ended it.  There was a brief attempt to resurrect it with new parities that failed, and thus beginning the current era of floating exchange rates.

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Japan's GDP Disappoints

Date: 15 August 2016

The US dollar closed the pre-weekend session well off its lows that were seen in response to the disappointing retail sales report.  It has been unable to sustain the upside momentum, and as North American dealers prepare to return to their posts, it is trading lower against most of the major currencies. The notable exceptions are the Scandi-bloc, which are consolidating last week's gains, and sterling, which remains pinned near $1.29.

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Emerging Markets Officials Express Exchange Rates Concerns

Date: 15 August 2016

EM FX ended the week on a soft note, despite the weaker than expected US retail sales report. Official concern about strong exchange rates is beginning to emerge. First, it was Korea, and then on Friday it was Brazil as acting President Temer said his country needs to maintain a balanced exchange rate, neither too weak nor too strong.

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