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Forex Blog
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Learn about the world of Forex
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Bernanke and the Dollar…Part Two
In December, I posted about Ben Bernanke (Bernanke’s Background and Near-Term US Monetary Policy), specifically about how a basic understanding of Bernanke’s academic background and philosophical approach to monetary policy could be useful for predicting the general direction of interest rates, irrespective of prevailing economic conditions. This post, is somewhere between a follow-up and a [...]
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Juris-my-diction Issues in Forex Regulation
Kudos to anyone who correctly identifies that reference. But seriously, in light of the proposed changes in forex regulation that have generated a heated response on this blog and elsewhere, I want to offer some insight into a tangential issue: jurisdiction.
Part of the problem with existing forex regulation is not that it’s insufficiently strict, but [...]
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Commodity Currencies Remain in the Spotlight
In 2009, so-called commodity currencies – both individually and as a group – registered record-breaking gains. The Brazilian Real and the South African Rand finished up more than 30%, while the Australian and New Zealand Dollars finished up about 25% each, and the Canadian Dollar not far behind. While the outlook for 2010 is slightly [...]
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New “Partition” in Forex Markets
In October, I wrote about a “separation” that had taken place in currency markets between the “sick” currencies and the “healthy” currencies. At the time, I argued that the former category was comprised mainly of the Dollar and the Pound, with most other currencies healthy by comparison. While I still stand by this paradigm, I [...]
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South African Rand Loses its Luster
In 2009, the South African Rand was the world’s second best performing currency, after only the Brazilian Real. Since September, however, it has stagnated, and over the next year, it is projected to fall 10%. What happened?!
The Rand represents an interesting case study because it sits at the nexus of several trends. The first is [...]
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SNB: Intervention Back on the Table
Pull up a 1-year chart of the Euro against the Swiss Franc, and you’ll quickly notice a salient trend: the exchange rate has hovered slightly above €1.50 since last March, with three notable deviations. The first occurred last March, when the Swiss National Bank (SNB) intervened in currency markets on behalf of the Swiss Franc, [...]
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Gold and the Euro? I thought it was Gold and the Dollar?!
Let me preface this post, by noting that I try to avoid writing about gold, since there are some many other excellent analysts out there writing about the subject. But when there is a such a strong overlap between gold and forex markets, well, I just can’t resist!
Recently, gold prices have collapsed at virtually the [...]
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New CFTC Forex Regulations Unpopular, but Worthwhile
I try not to editorialize much when writing this blog. There are too many talking heads as it is, which is why I try not to interject own opinions into the facts. Admittedly, the notion of facts in forex is obviously a bit murky, but I stand by my approach, nonetheless. Today, I would like [...]
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Dollar Carry Trade: Not Dead Yet
After the impressive rally in the US Dollar at the end of 2009, many market observers predicted that the end was near for the Dollar carry trade. That’s because volatility is the sworn enemy of carry traders; whenever there transpires a sudden change in direction in a funding currency, investors will usually race for the [...]
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Forex Reserves in Transition: Is the Euro Making a Run?
With so much to think about these days, I havn’t spent much time poring over foreign exchange reserve statistics. Apparently, this is to my detriment, as there have been a number of important developments on this front, some of which carry far-reaching forex implications.
I’m guessing a lot of you are probably in the same boat [...]
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