As well as hints from Asian authorities that they are going to diversify, we now have the U.S. acknowledging it. It's going to put the dollar under a bit of pressure. |
Both have the potential to provide dollar with negative surprises. |
Central bank's reserve diversification is now a global trend, although different central banks are citing different reasons behind the change. |
During that (November) period the U.S. assets market was performing quite strongly. But I think in the coming months we are going to see some softness in that data as well. |
Expectations in the bond market have been high, thus any disappointment over the auction (particularly with the level of foreign participation) could put the dollar under renewed pressure. |
Failure to meet market expectations here will reinforce the market perception that the peak in US rates is clear, putting the dollar under renewed pressure. |
Gains in commodities provided a positive backdrop for the Canadian dollar. |
I believe the German election result is the worst outcome possible for the euro. Not only is there no clear winner, it will be difficult for either side to form a coalition and there seems to be hostility to the idea of a grand coalition, |
I believe the German election result is the worst outcome possible for the euro. Not only is there no clear winner, it will be difficult for either side to form a coalition and there seems to be hostility to the idea of a grand coalition. |
I see euro/dollar testing the $1.1870 low in the next couple of weeks as there is no easy solution to this. |
If the minutes are in a similar tone to that of the FOMC statement, then the dollar should stay supported rather than gain significantly. |
If we see inflation to continue to come in on the soft side, then the market will intensify its speculation that the peak in U.S. rates is quite close. |
Investors do seem to be comfortable with the Koizumi agenda. The fact that there are ever clearer signs that he is going to be returned is going to provide the yen with support. |
It's just a little bit of a correction on the yen front. The Nikkei (stock market average) was down quite sharply overnight but everything points to a stronger yen still developing. |
Portfolio flows had been the main driving force behind dollar strength, ... During the summer months we see a slowdown in financial market activity, and this reduces the flows into the U.S. and hence reduces support for the dollar. |