On the other hand, the nascent recovery appears mostly a reflection
of dollar weakness — not EM strength.
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.
«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.
Not exact matches
But for now, the
weakness of the U.S.
dollar is another headache for the European Central Bank.
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.
LONDON, Oct 24 - The euro fell to a one - week low against the
dollar on Wednesday after worse - than - expected German business activity and sentiment data fuelled concerns
of weakness in the euro zone's largest economy.
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.
There is no question that the Aussie strength is a direct consequence
of weakness in the U.S.
dollar, Daryl Guppy writes.
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.
To the extent that
dollar weakness reflects disproportionate improvement abroad, it undercuts claims that US policy is the reason for recent strong performance since Donald Trump is not president
of the whole world.
Some but probably less than half
of the
dollar's
weakness can be explained by higher than expected inflation in the US.
Still, pockets
of weakness remain as lower oil prices continue to hinder investment in the energy industry and a firm
dollar restrains global sales.
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 balance
of the appreciation reflects forces other than U.S. -
dollar weakness and commodity prices.
Investors should monitor current events, as well as the ratio
of national debt to gross domestic product, Treasury yields, credit ratings, and the
weaknesses of the
dollar for signs that default risk may be rising.
Even without
dollar weakness, Monday's action conveyed very negative information from the standpoint
of our investment discipline.
The
weakness in the U.S.
dollar is essentially a reflection
of very weak demand conditions in the U.S., both for goods, and for U.S. security investments by foreigners.
In that context, a downturn in the
dollar can expected to mark any acceleration
of U.S.
weakness.
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.
Many British traders will likely be looking to capitalize on the relative
weakness of the
dollar when compared to the pound.
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.
Surely the
weakness of the
dollar is a reflection in significant part
of strengthening fundamentals in Europe, which if it signifies greater competitiveness is a reason to ease not tighten.
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.
Probably one
of the surprises in the coming year will be fresh
dollar weakness combined with falling commodity prices (i.e. global commodity prices falling faster than the value
of the
dollar itself).
Gold performed as expected during the quarter, serving as a safe haven and delivering positive returns, while the price
of oil surged more than 5 percent on U.S.
dollar weakness and news that OPEC and Russia could be cooperating to limit output for a long period.
Weakness in the U.S. currency rather than factors on the Canadian side are likely to be the primary catalyst for a slide in USD / CAD, according to BMO's global head
of foreign - exchange strategy Greg Anderson, who cited a market that's gotten ahead
of itself with regard to Federal Reserve tightening and a tax proposal that's likely to be
dollar negative.
Currencies profiting from the
dollar's
weakness included many from emerging markets, which collectively registered one
of their strongest quarters in many years.
That's resulting in a little bit
of a
weakness in the U.S.
dollar,»
Another
of the main beneficiaries
of the US
dollar's
weakness was the Japanese yen.
China's
weakness is an important part
of why the
dollar is so strong.
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.
The first few months
of the year, through to the second half
of April, were a period
of unilateral Australian
dollar weakness (Graph 28).
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.
So one
of the casualties
of easing credit fears is likely to be
weakness in the U.S.
dollar, and a concurrent strengthening in commodities - particularly precious metals, which serve as a currency substitute.
Treasury yields, credit ratings, and the
weaknesses of the
dollar for signs that default risk may be rising.
BEIJING — China's foreign exchange reserves rose slightly in March as broad U.S.
dollar weakness continued and escalating trade tensions between the world's two largest economies bolstered expectations
of a firmer Chinese currency.
-- 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
Chapman expects it will develop into a prolonged recession caused largely by the bursting
of the housing bubble and the
weakness in the
dollar attributable to the United States» large federal budget deficit and international trade imbalance.
Furthermore,
weakness of the euro and the British pound against the US
dollar, combined with market volatility caused by ongoing geopolitical uncertainty, presents managers with additional stock - picking opportunities in the region.
Regardless
of what was said by Trump and Mnuchin, the continued
weakness in the US
dollar has more negative consequences than positives.
Gold benefited from the
weakness of the
Dollar as it finally broke through the $ 1300 level that held back the precious metal for almost a year.
I'm struggling to ascertain if POUND strength is indicative
of overall
DOLLAR weakness as the market is searching for all alternatives.
The
dollar's
weakness should continue in at least the very short term, as bond yields keep on descending in the wake
of QE2 and investors flock to non-
dollar-denominated assets, says Marc Chandler, global head
of currency strategy at Brown Brothers Harriman, based 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.
Yen
weakness reduces the value
of the company's Japanese profits when expressed in
dollars.
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.
Currency Hedges Because
of the U.S.
dollar's continued
weakness relative to other global currencies, we added to existing hedge positions and initiated a hedge for part
of the Fund's euro exposure.