The Middle East conflict has taught us a lot about the FX market. Some moves we might have suspected beforehand, but some moves have still been a surprise.
While it might look as if the FX market will trade through to the end of the year in a very stable fashion, there are still a number of events that could generate...
If major currencies like the US dollar and the yen, and perhaps even the euro, stand to weaken as a result of political tensions, which currencies will win?
Politics dominates given two elections in Europe this week and the continued fallout from President Biden’s poor performance in last week’s presidential debate.
The US dollar has remained stable despite economic and monetary policy divergence between the US and many other countries, especially those in Europe. If currencies do...
Although prospects for interest rate divergence between the Fed and other G10 central banks is providing the US dollar with support, this is counterbalanced to some...
The US dollar has risen against the euro and the pound even though policy rate differentials have been very stable, particularly with respect to the UK.
Euro/US dollar has rarely strayed from a 1.05-1.10 range all year while, more recently, US dollar/yen has become stuck at a single level – which is 150.
G10 FX volatility remains low with implied one-month euro/dollar volatility below 7% right now, or around a half of the level that we were seeing a year ago.
The last week’s Fed, ECB and BoE meetings have been notable for the slightly more dovish, or hopeful comments from bank leaders.
We clearly don’t know if a post-COVID world is just around the corner or some distance away. But slowly and surely, things should improve, and, as they do, thoughts will...
The dollar remains on a firmer footing and the euro is in the firing line. These trends seem unlikely to change in the near term.
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