Top Fiat Money Vs. Gold: What Shines Brighter in 2016?

Aibek Burabayev - INO.com Contributor - Metals


It becomes a tradition to post a performance review of the top currencies vs. gold at the beginning of the new year.

Fiat money is represented by 7 currencies: The US dollar (USD) and 6 components of the US dollar index (DXY) placed by weight: euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and the Swiss franc (CHF).

Chart 1. Year-To-Date Dynamics Of Top 7 Currencies Versus Gold: No Comment

Chart 1. Year-To-Date Dynamics Of Top 7 Currencies Versus Gold
Diagram by Aibek Burabayev; Source: tradingview.com

The Euronews agency has a special rubric called “No comment” where they show video news without commentary as the picture speaks for itself when something dramatic, awful or really amazing is shown. I think the above diagram also speaks for itself and it shows the drama where the gold just smashed all of the fiat currencies as none of them could escape. None! Continue reading "Top Fiat Money Vs. Gold: What Shines Brighter in 2016?"

Top Forex Pairs VS. Gold: Another One Bites The Dust

Aibek Burabayev - INO.com Contributor - Metals


A year ago I wrote a post to compare the top currencies dynamics against Gold inside of the year. Today I want to repeat the experiment to see which one could beat the safe haven and which one couldn't. This time, you will see a modified version of the chart where the inverse metal crosses show not Gold's (last year version), but the currencies' dynamics for easier eye perception.

To remind you of the short list, there are seven currencies compared: US dollar (USD) and 6 components of the US dollar index placed by weight: Euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and the Swiss franc (CHF). Continue reading "Top Forex Pairs VS. Gold: Another One Bites The Dust"

Fed At Odds With Markets Over Oil

Lior Alkalay - INO.com Contributor - Forex


At long last, the market finally got their long awaited Federal Reserve rate increase. Yesterday, the Fed hiked the Fed Funds rate by 25 basis points, from 0.25% to 0.5%. The Fed's famously watched "dot plot" revealed that most members expect at least four rate hikes in 2016. And investors? If interest rate swaps are any indication, then investors expect no more than two rate hikes next year.

So who is right then? The Fed? Or the market? Continue reading "Fed At Odds With Markets Over Oil"

Hedge Your Dollars With Pounds?

Lior Alkalay - INO.com Contributor - Forex


Which currency is set to outperform? Is it the US Dollar or the Pound Sterling? Consider if you will that, despite some notable headwinds, the Fed is moving closer to a rate hike. For many, that suggests the Dollar as the best bet for the next 12 months. Especially with unemployment at 5.3% and core CPI now rebounding to 1.8% Year on Year. Yet some US data releases are still only "mildly" positive; for example gains in wages, slowed from 2.3% to just 2%.

On the other side of the Atlantic the Bank of England has signaled that it's warming up towards a rate hike, too. Yet, unlike in the US, gains in wages have been rising by 3.2% Year on Year. Moreover, GDP has been growing at a pace of 0.4% (QoQ) in Q1, far better than the negative figure posted by the US. So is the Sterling looking better than the Dollar? Not exactly. Then is the Dollar looking better than Sterling? The answer is, once again, not exactly. But here's the thing. Continue reading "Hedge Your Dollars With Pounds?"

Is The Dollar Overvalued?

Lior Alkalay - INO.com Contributor - Forex


The US economy just seems to get better and better; better than robust retail sales, knockout earnings in payrolls and confident consumers raring and ready to spend more and more. Yet, after a rally that stretched all the way from early May, the last few days have been rather mixed for the Dollar, turning its monthly return against peer currencies into a virtual flat line. What might be the reason for that and should it affect your FX strategy? The answer to those questions is our focus for today.

The Growth Gap

If the outlook for the US economy and the US Dollar are so positive, what then could make investors question their Dollar bullish bets? Continue reading "Is The Dollar Overvalued?"