The US dollar is on steroids this morning as the sell-off in global equities sends the dollar to a 2 year high against the Euro. The EUR/USD is within 3 percent of its fair value of 1.20 while the GBP/USD and USD/JPY are now undervalued on a purchasing power parity basis. However PPPs [...]
Entries Categorized as 'G7 meeting'
EUR/USD Hits 2 Year Highs, Growing Chance of Coordinated Cuts
October 27, 2008
G7 Issues Statement on Currencies: All Talk, No Action
October 27, 2008
The G7 released a statement on the Japanese Yen this morning, but unfortunately it is all talk and no action which suggests that the Japanese may have had a hard time convincing their US and European counterparts to join in on any physical intervention to sell Yen.
In this type of market environment, open threats [...]
Is There a Fix? Dow Down 678, More Losses in FX
October 9, 2008
Another day, another plan from the US government that has failed to impress the markets. This morning, the Treasury said that they will be injecting capital directly into banks by taking an equity stake. In theory this announcement should give banks the peace of mind to start lending as a direct capital injection from [...]
US: Forget About a V-Shaped Recovery, Maybe a W or L
September 19, 2008
The volatility that we have seen in the currency, stock and bond markets this past week has not been for the faint of heart. The Dow Jones Industrial Average fell 500 points on Monday, but instead of continuing lower over the course of the week, it staged the biggest 2 day rally in 5 [...]
US Consumer Prices, EU Referendum and G8 Meeting Weighs on Euro
June 13, 2008
Since the beginning of this week, the Euro has fallen more than 500 pips against the US dollar, its biggest weekly gain in 3 years. The prospect of a rate hike by the Federal Reserve in August and/or September as well as key event risks over the next 48 hours has currency traders rushing [...]
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