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Euro Taking Another Leg Down

October 26, 2010
Into the European close, the euro has broken down further. A break below $1.3835 warns of the increased risk of a return to last week's low near $1.3700. The unwinding of long euro cross positions, especially against sterling seems to be a contributing factor. Yet, given the euro's strong gains against Swedish krona, Swiss francs some east…
Euro Taking Another Leg Down Euro Taking Another Leg Down Reviewed by Marc Chandler on October 26, 2010 Rating: 5
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Observations about the Yen Conundrum

October 26, 2010
The yen appears to simply trend higher regardless of the extension of the BOJ's QE and what happens in other markets. Neither the rising equity markets (risk-on) nor the widening on interest rate differentials (10-year) has been able to deter yen buying. The market appears to have turned cautious about pushing the dollar below JPY80. The G20 s…
Observations about the Yen Conundrum Observations about the Yen Conundrum Reviewed by Marc Chandler on October 26, 2010 Rating: 5
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Dollar Firm, but the Pound is Sterling

October 26, 2010
The US dollar is still consolidating/correcting its recent decline against most of the major currencies today. The notable exception is the British pound, where a considerably stronger than expected initial estimate of Q3 GDP (0.8% quarter-over-quarter vs 0.4% consensus) and an upgrade in its sovereign rating to stable from negative has bolstered …
Dollar Firm, but the Pound is Sterling Dollar Firm, but the Pound is Sterling Reviewed by Marc Chandler on October 26, 2010 Rating: 5
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Q3 US GDP Oct 29

October 25, 2010
The US reports Q3 GDP at the end of the week. Expectations appear to have crept up and now stand around 2%. This is after a disappointing 1.7% annualized growth in Q2.
Part of the improvement is expected to come from consumption, which is expected to tick up to 2.4% from 2.2%. This would be the strongest since before the crisis began. In the 2003-…
Q3 US GDP Oct 29 Q3 US GDP  Oct 29 Reviewed by Marc Chandler on October 25, 2010 Rating: 5
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Dollar Slumps Post G20

October 25, 2010
The US dollar is broadly weaker in the wake of the G20 statement that appeared to encourage flowing in emerging markets and risk assets in general. Leading the move is the Australian dollar and Swedish krona. The larger than expected rise in Q3 PPI (1.3% vs 0.5% consensus) and hawkish comments from RBA Governor Stevens, coupled with anticipation o…
Dollar Slumps Post G20 Dollar Slumps Post G20 Reviewed by Marc Chandler on October 25, 2010 Rating: 5
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Euro Dollar Outlook

October 22, 2010
Executive Summary:We suspect the dollar’s decline against the euro is reaching its final stages. US interest rates appear to have largely priced in some form of quantitative easing by the Federal Reserve (though headline risk remains in terms of the actual decision) and European rates have risen to a price in the risk of an ECB rate hike in Q1 11.…
Euro Dollar Outlook Euro Dollar Outlook Reviewed by magonomics on October 22, 2010 Rating: 5
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Current Account Targets

October 22, 2010
US Treasury Secretary Geithner has proposing that G20 members restrain large current account imbalances. Over the last quarter of a century such ideas were mostly aimed against the US, however, like the currency war language, the US has coopted the issue and has managed to turn it around.
He is also turning on its head the traditional burden that …
Current Account Targets Current Account Targets Reviewed by Marc Chandler on October 22, 2010 Rating: 5
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Take Aways from This Week

October 22, 2010
The US dollar continues to trade choppily against the major foreign currencies as corrective pressures encounter the underlying bearish sentiment. The unexpected rise in the German IFO (107.6 vs consensus 106.5 and 106.8 in Sept) and talk of sovereign interest helped the euro recover after nearing $1.3850.
Sterling retested the week’s low near $1.…
Take Aways from This Week Take Aways from This Week Reviewed by Marc Chandler on October 22, 2010 Rating: 5
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Another Twist on Reserve Diversification

October 21, 2010
We have identified the interest rate differential theme as the major driver in the foreign exchange market. Another theme has also impacted the foreign exchange market is the diversification of new reserve accumulation. The focus here is primarily Asia. A number of central bank Asia are believed have intervened in the recent period. They buy dolla…
Another Twist on Reserve Diversification Another Twist on Reserve Diversification Reviewed by Marc Chandler on October 21, 2010 Rating: 5
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