Dollar weakness has carried on for the past few days as traders continued to adjust positions to account for the downbeat inflation outlook shared by Yellen and most FOMC policymakers.
Even extreme recent U.S.
dollar weakness has failed to stem Bitcoin's harrowing drop from $ 19,000 in mid-December.
U.S.
dollar weakness has added to commodity price gains, but we see other factors driving prices from here.
«We're pretty much back to where we were at the beginning of the year, so a lot of
the dollar weakness has been pretty much wiped out,» said Sireen Harajli, foreign exchange strategist at Mizuho in New York.
An improving US economy, falling unemployment and the prospect of more Australian
dollar weakness had us thinking that its suburban office buildings were going to further increase in value.
Not exact matches
After his speech, Poloz said the recent
weakness in the loonie hasn't
had much of an impact on Canadian exports, which tend to benefit from a slide in the
dollar.
In the last couple of months, oil
has tended to move inversely to the
dollar, as
weakness in the currency makes it cheaper for non-U.S. investors in crude to buy and vice versa.
Better China data and a weaker
dollar has a slight bid under Industrial metals as well as Ore - but
weakness persists in Oil - Brent is off 2.2 % and WTI 1.6 % as Saudi signals they r fine with South of $ 90 - even as low as $ 80.
Gartner noted that the
weakness of other currencies against the
dollar had led to price hikes in certain regions, leading in turn to fewer sales.
The rally
has technical limits and two significant resistance features which may act to cap the rise and drive the Australia
dollar into
weakness.
Dollar weakness, which continued into early January after its biggest annual drop since 2003,
had helped to lift assets priced in the U.S. currency, with gold last week registering a fourth straight weekly gain for the first time since April.
Renewed confidence in the European economy and persistent
weakness in the
dollar have driven the euro up 16 percent against the U.S. currency from the first quarter last year to the end of March 2018.
Following Christmas and New Year holidays we
have seen a new bout of
dollar weakness across the board which may not be over yet based on recent price developments.
Elsewhere in forex markets, it's a relatively calm day, with a slight correction in the risk - off trade that we
have been monitoring for weeks, as the yen is a tad lower today against all of its major peers, while the
Dollar couldn't gain on risk - on currencies, despite the equity
weakness.
The
dollar's
weakness has also been pervasive against Canada and Mexico, which
have not
had growth surprises.
Global reflation, combined with U.S. -
dollar weakness, created investor complacency that ideal liquidity conditions
would continue indefinitely.
The concerted weakening in commodity prices already suggests a global force to this economic downturn, while further
weakness in the U.S.
dollar would suggest that demand for U.S. goods and securities was softening even more sharply than internationally.
The fact that many advanced economies are suffering from deficient demand and
have policy rates at or near the zero bound and that the U.S.
dollar is a favored safe - haven asset may imply that adverse foreign demand shocks
have a particularly strong effect on the value of the
dollar, effectively transmitting the
weakness to the U.S. economy.
Following a January rally, the global commodities complex underwent declines in February before partially recovering in March; for the first quarter as a whole, the benchmark Thomson Reuters CoreCommodity CRB Index (CRB) gained 0.8 % on a price - only basis.1 Among the 19 component commodities tracked by the CRB, advancers
had a slight edge over decliners, buoyed by growth in global economies and
weakness in the trade - weighted US
dollar, which retreated 2.1 %, according to the Federal Reserve's (Fed's) US Dollar Index.1 Aside from robust gains for a host of agricultural products, oil and gold were also among the commodity wi
dollar, which retreated 2.1 %, according to the Federal Reserve's (Fed's) US
Dollar Index.1 Aside from robust gains for a host of agricultural products, oil and gold were also among the commodity wi
Dollar Index.1 Aside from robust gains for a host of agricultural products, oil and gold were also among the commodity winners.
Strength in the U.S.
dollar,
weakness in the commodity sector and still lingering trade war fears
have made longs jumpy.
EM currencies
have seen broad
weakness driven mostly by the USD rally and higher
dollar rates, and this week looks pivotal for the
dollar outlook.
It is highly unusual for both to occur together, so a simultaneous drop in both Treasury yields and the
dollar would be a very powerful signal of impending economic
weakness.
In my view, the most likely accompaniment to economic
weakness would not be a decline in nominal rates, but somewhat accelerated inflation (meaning that real interest rates might very well fall to negative levels), and possibly substantial
weakness in the U.S.
dollar.
Recent
weakness in the Australian
dollar may
have reflected the fact that the market
had become over-extended as the exchange rate
had risen for six months in a row, with a cumulative rise of 25 per cent.
The strength of the
dollar relative to the euro and yen
has often been cited as a key factor in gold's
weakness since last September.
As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which
would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market
has now outlived the median and average bull, yet at higher valuations than most bulls
have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which
would become more of a factor if we observe a substantial widening of credit spreads and
weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S.
dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic
weakness.
With the market apparently far more concerned with perception than reality when it comes to the Fed, any tendency toward higher inflation figures or substantial
dollar weakness is likely to make investors fret that the Fed might not be able to «ease» as aggressively as it otherwise
would.
Though a strong
dollar and
weakness in China
have had a negative impact on U.S. corporate earnings, neither
has had a material impact on overall U.S. growth.
-- 4 reasons why «gold
has entered a new bull market» — Schroders — Market complacency is key to gold bull market say Schroders — Investors are currently pricing in the most benign risk environment in history as seen in the VIX — History shows gold
has the potential to perform very well in periods of stock market
weakness (see chart)-- You should buy insurance when insurers don't believe that the «risk event» will happen — Very high Chinese gold demand, negative global interest rates and a weak
dollar should push gold higher
Regardless of what was said by Trump and Mnuchin, the continued
weakness in the US
dollar has more negative consequences than positives.
But further strength in the U.S.
dollar would likely be good for equity markets that traditionally outperform on their currency's
weakness, such as Japan and the eurozone, as a stronger
dollar will make their exports more competitive.
A strong jobs number for June, (which is not being forecast based on previous June vs May
weakness)
would likely result in the US
Dollar turning up vs quite a few developed and Emerging market currencies.
Dollar / yen
weakness has also roiled markets.
The US
Dollar index could begin a larger rally given the
weakness in Pound sterling which
has a lot of momentum vs USD while the BOJ meeting is on deck for the Japanese, with most eyeing Kuroda to attempt to weaken the Yen using new methods.
Our exchange rate against the US
dollar and the currencies of most of our trading partners
has shown little net change over the past year, and the rise in the trade - weighted index in recent months
has been due mainly to the
weakness being experienced by the Japanese yen.
Despite the continued
weakness in commodity markets, the further decline in the Australian
dollar against the major international currencies
has meant that, in domestic - currency terms, commodity prices
have remained roughly stable in recent months.
But even better is that strength in $ GLD is now backed by
weakness in the US
Dollar, which
has created another new buying opportunity in the Japanese Yen ETF ($ FXY).
The
dollar did not
have much of an impact on many instruments but as far as the gold prices were concerned, the market did show a lot of
weakness even on slight note of strength from the
dollar.
Now I understand that it
would be bad business to highlight the
weaknesses of the organization, but if what's good for TFA is bad for the country's education system then it is quite irresponsible for TFA not to give the whole story so legislators can make informed decisions about, for example, whether or not to spend millions of
dollars of tax payer money to bring more TFAers to their districts.
But further strength in the U.S.
dollar would likely be good for equity markets that traditionally outperform on their currency's
weakness, such as Japan and the eurozone, as a stronger
dollar will make their exports more competitive.
1) Gary Shilling — The US
Dollar has its
weaknesses, but is stronger than all of the alternatives, because the US possesses a lot of strengths not found in the rest of the world.
Therefore, the strength or
weakness of the US
dollar has no effect on the return that international equity ETFs deliver to Canadians.
Gold RisesThe gold prices
have moved higher in a slow and steady manner as a combination of increase in risk and the
weakness in the
dollar has given some well needed respite for the gold markets over the last 24 hours.
I also think that the overseas profit numbers (a significant chunk of their revenues)
have taken a beating because of the higher
dollar, and not because of systemic
weakness in the underlying business.
Companies with a large share of global sales
have outperformed other groups of stocks this year based on the uncertain prospects for the US economy, U.S.
dollar weakness, and high hopes for a global economic recovery, spurred by developing economies.
But Ryoji thinks they can figure a way to make things work: «As to the situation of the US
dollar's
weakness in the medium to long term, we already
have a strategy to deal with it.»
The same day (December 5) AIG tells the federal government (in a regulatory filing) that its auditor
has found a «material
weakness» in its valuation of the swaps and expands its prior disclosures of unrealized losses almost 6 billion
dollars through November of 2007.
This exemplifies how little influence U.S.
dollar strength /
weakness has exerted on Bitcoin prices to date.