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Currency

The Rising Dollar’s Impact on Emerging Markets

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Posted by Larry Edelson - Money & Markets

on Tuesday, 22 November 2016 07:54

The greenback has been on a tear as of late, rallying about 5.5% since the dollar index bottomed out just below 96 on election night.

In fact, the dollar index is up 10 days straight — the biggest surge since May 2015.

That puts the dollar at its best level in over 14 years.

Reasons: Simple …    

FIRST, is all the flight capital leaving other countries and regions of the world that are in far worse shape than the U.S. Europe is going down the drain. So is Japan. So is the Middle East.

Plus, the more China opens up its currency market, the more yuan leave as wealthy Chinese get the opportunity to diversify and invest … and their main target is the U.S. of A.

SECOND, is that the dollar is now pricing in an inevitable rate hike from our Federal Reserve.

And THIRD, is general optimism over President-elect Trump’s policy of strongly desiring to repatriate the nearly $3 trillion of U.S. corporate money sitting overseas. A tax holiday of some sort is in the offing for that huge stash of cash and repatriating it would be hugely bullish for the dollar and for the U.S equity markets.

So it’s no surprise that my AI models have forecasted this rise in the dollar for some time now. And those same models are telling me that this trend should continue.

In fact, this chart clearly shows that the dollar index could easily continue moving higher heading into next year …

112116 1458 TheRisingDo1

So, what does this all mean?



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Currency

Huge Moves - Time to TipToe Short Term

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Posted by Michael Campbell & Victor Adair

on Monday, 21 November 2016 07:27

The Dollar & Bonds market reaction to Donald Trumps election has been massive and the movements dramatic. Its time to step carefully depending on your time frame. Victor on the likelihood of a Fed interest rate move and the huge ETF sales in the Gold.

...related Dr. Michael Berry: The Fed is Throwing Up Its Hands

trader2

 



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Currency

Dollar charge pauses as bond bashing relents

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Posted by Marc Jones - Reuters

on Friday, 18 November 2016 04:15

Battered bonds and emerging market currencies enjoyed some respite on Thursday as the dollar took a breather from a post-U.S. election charge that has taken it to a 13-1/2 year high.

Screen Shot 2016-11-18 at 3.09.13 AM

The financial market looked set for a quiet start and Europe's main stock markets were shuffling sideways as the dip in global bond yields cooled bank stocks, which have been rising on hopes higher yields will led to better lending profits.

The dollar dropped a modest 0.1 % against other top world currencies after data showing the biggest increase in U.S. consumer prices in six months.

But the fact it hadn't quite clawed back yet marked a change of direction after eight days of back-to-back gains that have seen it jump almost 4 %.

"The momentum of the Trump rally (in bond yields and the dollar) has faded a bit so we are all trying to recover," said Rabobank strategist Philip Marey.

He said investors were mainly trying to get a handle on what U.S. President-elect Donald Trump is likely to do when he takes office in January, as well as position for what now looks almost certain to be a U.S. interest rate rise next month.

Trump was set for meeting with Japanese Prime Minister Shinzo Abe in New York while in her first comments since last week's election, Federal Reserve chief Janet Yellen said the case for a rate hike has strengthened.

"Such an increase could well become appropriate relatively soon," Yellen said in remarks due to be given to Washington politicians later.

Japanese yield cap 



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Currency

Oil Trading Alert: Non-USD Picture of Crude Oil

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Posted by PremPrzemyslaw Radomski - Sunshine Profits

on Wednesday, 16 November 2016 09:13

0riginally published on Nov 15, 2016, 10:01 AM


Trading position (short-term; our opinion): Long positions (with a stop-loss order at $41.39 and initial upside target at $49.53) are justified from the risk/reward perspective.

Although crude oil moved lower after the markets open, oil bulls stopped further deterioration and triggered a rebound in the following hours. As a result, light crude erased most of earlier losses and closed the day above Friday's low. What can we expect in the coming days?

Let's examine the charts below and try to find out (charts courtesy of http://stockcharts.com).

43058 a
Larger Image



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Currency

Trumpism = Inflation

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Posted by Bill Bonner - Diary of a Rogue Economist

on Monday, 14 November 2016 15:44

inflationBALTIMORE – “I couldn’t believe it,” said a friend with grandchildren in a private school in the Washington area. “Their school provided grief counseling!”

“Grief counseling?”

“Yes. Apparently, students were so upset by Donald Trump’s victory that the school thought it should provide psychologists to help them get over it.”

The New York Times, too, seemed to need therapy. 

Its weekend edition is full of blaming, scapegoating, and flagellation. Hillary blames FBI Director Comey for her defeat. One columnist says white Americans have become racists. 

Another says women are deplorable, too. They didn’t support Ms. Clinton as they should have. “Behind these angry white men are angry white women,” it points out.

Five days have passed since the election results were announced. Many people are still hysterical. They should calm down and take a closer look.

The System Works

Already, the dots are coming together. What we see is this: The system works! 

That is, the system whose main purpose is to protect the system continues to do so. 

“The Donald” may be getting ready to mount his throne. But the Deep State – America’s “shadow government” – stays in Heaven. 

First, Mr. Trump used his victory announcement to signal that easy credit – upon which the system depends for funding – will get even easier. 

To the easy monetary policy, he will add easy fiscal policy. As much as an additional $1 trillion will be spent on “infrastructure.” On credit, of course.

As one of Mr. Trump’s economic advisers, Anthony Scaramucci, wrote in the Financial Times this weekend:

While easy-money monetary policies have exacerbated the income divide, central bankers handcuffed by political dysfunction have had little choice but to provide extraordinary accommodation… [B]usiness people like Mr. Trump understand you can grow yourself out of excessive debt.

What we think he meant to say was that you can “inflate” your way out of excessive debt by spending more than you can afford – if you can get Congress to go along.

This new spending was just what President Obama asked Congress for and couldn’t get. It was what big-spending economists such as Larry Summers, Paul Krugman, and Joseph Stiglitz had urged. 

It’s what the Financial Times has called for from the get-go. And now the same Republicans who stopped President Obama’s infrastructure spending proposals are expected to come forward and approve Mr. Trump’s program.

Steel! Ships! Concrete! Woohoo!

All Hell Will Break Loose



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