- Don’t be Fooled by the Pullback in the Dollar Because…. - November 14, 2018
- Rise of the USD – How high can it go with - November 14, 2018
- VIDEO – Targets for GBP, USDJPY and EURO - October 5, 2016
- RBA Meeting Preview - October 3, 2016
- How to Trade the Dollar into the Presidential Debate - September 26, 2016
- Here’s How to Trade the Sept ECB Rate Decision - September 7, 2016
- Bank of Canada September Preview - September 6, 2016
- Will August Payrolls Disappoint the Dollar? - September 1, 2016
- Where is the Dollar Headed this Week? - August 29, 2016
- Will Aug NFPs Help or Hurt USD/JPY? - August 4, 2016
We are inching closer to a formal bailout plan for the Big 3 automakers and as previously suggested, regardless of the final outcome, the markets will cheer an end to the drawn out drama. The rally in equities this morning have driven major currencies higher against the US dollar and Japanese Yen, but it remains to be seen whether the improvement in investor sentiment will last. We are walking into a lot of potentially weak economic data on Thursday and Friday that could serve as a harsh reminder of the problems that the US economy faces. The PPI and retail sales figures should resurrect concerns that deflation and depression will hit the US.
The Treasury market is already pricing in the possibility of deflation and depression with yields in zero to negative territory for the first time since the Great Depression. Fed Fund futures are pricing in a 100 percent chance of a 75bp rate cut from the Federal Reserve next week. This would take US rates to 0.25%, making the US dollar the lowest yielding currency in the developed world. Although the greenback has remained weak against the Japanese Yen, if the Fed takes interest rates to zero, we could see the dollar fall to 13 year lows against the Japanese Yen.