The currency and rate futures markets are pricing in a rate hike by year-end and two by the middle of next year and this is why the euro has strengthened, especially against the yen. |
The dollar was given a kicker to the downside. Basically it followed the fall in precious metals in New York overnight. |
The Fed is probably going to hold to see how the economy plays out. There's even some concern the U.S. economy had already started to slow down before the hurricane. If that's the case, it's quite bearish for the dollar. |
The hopes were not high for a clear winner based on polls last week, but the poor showing of the CDU suggests the German people were against further pro-business reforms. |
The market has been trading on the hurricane news. |
The market is currently factoring in rate hikes toward the end of the year of as much as 50 basis points. That's about right, considering the kind of strong economic numbers we have got out of Japan. |
The market is expecting a fairly upbeat assessment by Greenspan. This is one reason why the euro is not trading significantly higher against the dollar but is in a range, |
The RBNZ has been talking the currency down for over a year and certainly won't discourage further falls. A negative trend in the currency has taken hold and the presumption that the economy will struggle this year, without a much lower currency, will keep it trending lower. |
The sharp rally in the yen last week may not last. There is chatter about an impending policy tightening by the BOJ, but this is still around six months away at least. |
The U.S. dollar might grind a little higher as the United States comes back from a long weekend. But I think it is going to be a quiet week. |
The yen has been a definite influence on Asian currencies. Korea definitely has one eye on the yen. I suspect Korea would hope the yen would move more than the won. |
There is some kind of a shift under way, with the large move over the last couple of days testing the bottom of its range for the last year. |
This number is quite a shock. This is a short-term negative for the currency and I'm surprised it hasn't fallen further. |