User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Tuesday October 19, 2010 - 14:18:12 GMT
Foreign Exchange Analytics - www.fxa.com

Share This Story:
| | Email

Forex Blog - Dollar Détente (FXA)

Dollar Détente

 

US Treasury Secretary Geithner finally was heard on the USD and in the context of recent market moves (huge decline)…he did not chant the dollar mantra but he did state emphatically that the US is not devaluing the dollar (maybe the Fed is) and it is working hard to retain confidence in the currency.  I think we can conclude that the US Treasury is doing its part to defuse the potential for a currency war and registering an alarm…the dollar has fallen fast enough if not far enough against everything but the yuan.  And even on this front, where the threat of a currency war is greatest, the US Treasury last Friday decided to postpone a report to Congress on the yuan to allow for more bilateral and multilateral discussions with the Chinese in upcoming G20 meetings (one this Friday and Saturday and the other in November and both in South Korea) and noted that recent appreciation in the yuan is welcomed and helpful (a pace that might meet US demands if maintained is how I read it).  And it is also noteworthy that the PBOC today hiked key rates 25bps (took the 1-year lending rate at 5.56%) and was the first increase since 2007.   Surely the PBOC would not be raising rates and allowing for a faster rate of appreciation (it has slowed in recent days) unless it was worried about domestic overheating and would suggest that a higher yuan is appropriate (I don’t view a rate hike as a substitute for yuan appreciation, but a compliment).  I can’t help but conclude that all of these events are connected…not planned in mutual fashion but indeed represents a real attempt by the US and China to tamp down currency tensions ahead of G20.  I call it Dollar Détente. 

 

I know that some countries and groups of countries like the EZ are eager to see G20 agree to try to stabilize FX (read stabilize the dollar) but this is not in the cards from a US perspective.  First and foremost the Fed is really indirectly determining where the USD trades with its deployment shortly of QE2.  The US Treasury may think the USD has fallen fast enough and perhaps far enough (except versus the yuan) but this could prove irrelevant for markets as QE2 trumps official jawboning and if ever deployed currency intervention.  The most US Treasury can achieve with well timed signals like the one from Monday in California is to slow the dollar’s decline – introduce 2-way risk – but not reverse the trend or stabilize the dollar…not when the Fed is ready to embark on open-ended quantitative easing (no way the market can discount this given that it can and will be adjusted as more data points are received…could be a lot less or a lot more than say $100bln a month which Fed’s Lockhart seemed to imply was a reasonable starting point today.  Frankly there is no way the Fed is going to limit QE2 to some USD path.  And frankly the Chinese has an argument that QE2 is every bit a form of FX manipulation as is Chinese currency intervention selling CNY for USD, if less direct. 

 

I think US Treasury has had an epiphany on the dollar decline.  It now recognizes as I have above that QE2 is a very powerful downdraft for the USD ahead and the only way to offset or delay some of the effect from the Fed printing more money is to go on record with a verbal defense of the dollar as a reserve currency as happened Monday with the Treasury Secretary’s remarks (as best I can discern they were not prepared remarks but extemporaneous remarks and Geithner spoke on the dollar in an unprompted fashion…deliberately).    I don’t believe the US Treasury is ready to agree to joint USD currency intervention at G20 in South Korea Friday and Saturday, but I would also not exclude this kind of response from the policy options down the road…key for US engaging intervention is dollar decline disrupts asset prices (Treasuries or stocks). 

 

I also think it is pretty clear that Geithner finds the strong dollar mantra unhelpful (as has every Treasury Secretary since Rubin with O’Neil the only one to publicly question the mantra and regrettably so) and I may have been “correct” in noting last week on FXA On-line that it was euthanized…Dr. Kevorkian was seen on the third floor of US Treasury building…clearly ECB President Trichet was not cc’d on the email as he continues to chant the mantra on behalf of US Treasury officials.

 

Dollar concerns outside the US are ubiquitous…even Canada is worried – see BOC statement today on FX market volatility.  Brazil raised taxes on foreign fixed income investments on Monday.  South Korea’s government is moving in a similar direction.  Let[‘s face it the falling dollar is taking activist currency policy from intervention (limits reached in reserve accumulation and now distortionary for interveners and non-interveners as managers diversify into gold and non-USD bonds…ask Japan on China JGB purchases) to capital controls.  Capital controls in emerging markets might be a first best alternative for more USD accumulation in the near-term by reserve managers, but it is problematic over the long run and creates other unintended consequences.  I think the US Treasury gets this and we should expect to hear more FX messages ahead from Geithner.

 

However, with the Fed QE2 not yet launched and open ended, again I think this trumps US Treasury concerns on the dollar and capital controls in places like Brazil and South Korea.  Yes we are due for USD bounce into G20, but a reversal of trend?  I think not.

 

David Gilmore  

 

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top Weekly WTI Statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105