The Dollar Takes 'EM Down

Aibek Burabayev - INO.com Contributor - Metals


Dear readers, I am very grateful to get all your feedback and suggestions that you kindly share with me all the time! Rasesh Shukla, one of our regular readers asked about the Emerging market currencies and particularly about Indian rupee in a comment this month. And I am pleased to share my thoughts with all of you in this post.

Chart 1. 5-Year Dynamics of Top FX vs. EM FX

5-Year Dynamics of Top FX vs. EM FX
Chart courtesy of tradingview.com

I want to start with the comparison chart of the top currencies presented by inverse dollar index, consisting of 6 currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc (orange line) versus the emerging market currencies presented by WisdomTree Emerging Currency Strategy Fund (CEW, green line). The former is quite representative, it tracks the value of the following 15 currencies: Mexican Peso, Brazilian Real, Chilean Peso, Colombian Peso, South African Rand, Polish Zloty, Russian Ruble, Turkish New Lira, Chinese Yuan, South Korean Won, Indonesian Rupiah, Indian Rupee, Malaysian Ringgit, Philippine Peso and Thai Baht. Continue reading "The Dollar Takes 'EM Down"

Speculative Bets On The Aussie To Rise?

Lior Alkalay - INO.com Contributor - Forex


Ever since China's stock woes escalated it seems all commodity-related trades have sunk under water. The Aussie took a nose dive vs. the two dominant safe havens, i.e. the US Dollar and the Japanese Yen, and turned range bound vs. the Kiwi.

In the not too distant past, there had been some signs of a tentative recovery in the Aussie. However, those signs quickly became mixed messages, offering nothing but false hope. Simply put, China continued to lose its grip on its financial system. Now, as always, China has been the wild card for the Aussie. We've already elaborated on the fact that China can't keep the Yuan high; at best, it can only slow its depreciation. But can China's latest actions be the springboard for the Aussie to rally? Continue reading "Speculative Bets On The Aussie To Rise?"

Are Investors Secretly Turning Bearish On The Dollar?

Lior Alkalay - INO.com Contributor - Forex


Less than two weeks into 2016 and history has already been made. This January will go down in the record books as Wall Street’s worst in decades. China is losing control, the Middle East is boiling over and the Emerging Markets are in dire straits. All of which has led stocks to shed more than a trillion dollars in value.

It’s the classic boiling-to-the-brim pot which suggests we’re ready to push the dollar higher, right? Instead, dollar strength has really been rather tame which, on the face of it, is quite puzzling. That is unless investors have secretly been turning bearish on the greenback. The question is, are they? Continue reading "Are Investors Secretly Turning Bearish On The Dollar?"

Will 2016 Bring A Turnaround In FX?

Lior Alkalay - INO.com Contributor - Forex


The year 2015, no doubt, has been a year to remember. Markets saw the first Fed rate hike in years which pushed the Dollar ever higher. In the Eurozone, the ECB's QE pushed the Euro to lows it hasn't seen in years. And in China, the Yuan, too, is being pushed to record lows as China's economy gets squeezed.

Now, with 2016 practically knocking at the door, the question is will 2016 be the year of a turnaround? Or will the themes of 2015 continue to dominate? Here are some major areas to focus on which can help us figure it all out. Continue reading "Will 2016 Bring A Turnaround In FX?"

Let's Take A Look At The Currency Markets

In light of the news from the land of the rising sun and the sinking currency, let’s reserve NFTRH 315’s only real charting for a big picture monthly view of currencies, to which we usually give just a brief update, and then some misc. big picture monthly charts [not included in this excerpt] as we try to gain perspective on things that may seem illogical to our rational minds.

xjy

Yen is losing the next level of support.  BoJ saw that support too. I’ll bet they also took note of the big October bounce and found it unacceptable.

xeu

The Euro is losing the support zone after bouncing above it in-month. Continue reading "Let's Take A Look At The Currency Markets"