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Great Graphic: New Highs in Fed's Real Broad TWI

August 05, 2015
The most important measure of the US dollar's exchange rate from a macroeconomic point of view is a measure adjusted for inflation that is weighted according to trade flows.  The Federal Reserve tracks a real broad trade weighted measure of the dollar. 
The measure of the dollar had peaked in March near 94.85.  It backed off to almost 93.25 in…
Great Graphic: New Highs in Fed's Real Broad TWI Great Graphic:  New Highs in Fed's Real Broad TWI Reviewed by Marc Chandler on August 05, 2015 Rating: 5
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Alphabet Soup Day: SDR, PMI, ADP

August 05, 2015
There are three main talking points today:  1) The divergence in the trajectory of monetary policy, illustrated by Atlanta Fed's Lockhart yesterday, and to be tested today by the ADP private sector employment estimate;   2) The July service sector PMIs; and 3) The IMF's update on the yuan's inclusion in the SDR
Lockhart suggested for so…
Alphabet Soup Day: SDR, PMI, ADP Alphabet Soup Day:  SDR, PMI, ADP Reviewed by Marc Chandler on August 05, 2015 Rating: 5
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Great Graphic: Canadian Dollar and the 2-yr Interest Rate Differential

August 04, 2015
Over the last 100 sessions, the Canadian dollar and oil (front month light sweet crude) have moved in the same direction about 79 times. From the middle of November 2014 through mid-January, the relationship was even tighter at about 95 days on a rolling basis. 
However, the capital flows into and out of Canada swamp the value of oil exports, whic…
Great Graphic: Canadian Dollar and the 2-yr Interest Rate Differential Great Graphic:    Canadian Dollar and the 2-yr Interest Rate Differential Reviewed by Marc Chandler on August 04, 2015 Rating: 5
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Thoughts on the US Rate Conundrum

August 04, 2015
The Federal Reserve could be six weeks away from raising rates.  The FOMC statement from the end of last month appeared to have lowered the bar of a move.  It called the recent improvement in the labor market as "solid" and wanted to see "some" more.   
The Bloomberg consensus increase of 225k increase in the July nonfarm payrol…
Thoughts on the US Rate Conundrum Thoughts on the US Rate Conundrum Reviewed by Marc Chandler on August 04, 2015 Rating: 5
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Corrective Forces, Led by the Aussie, Weigh on Greenback

August 04, 2015
Narrow ranges in the foreign exchange market continued for the most part, and the US dollar is a little softer.  The Reserve Bank of Australia did not talk the Aussie lower, and the data were better than expected.  This sent the Australian dollar sharply higher.  Its 1.25% gain is the biggest in two months.  This coupled with gains in Chinese stoc…
Corrective Forces, Led by the Aussie, Weigh on Greenback Corrective Forces, Led by the Aussie, Weigh on Greenback Reviewed by Marc Chandler on August 04, 2015 Rating: 5
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