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Currency

Myriad of Signs

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Posted by Przemyslaw Radomski

on Wednesday, 29 March 2017 07:05

In yesterday’s alert we emphasized that the breakdown in the USD Index should not be trusted as it was not confirmed and there were several good reasons to think that it would not be confirmed. The breakdown is already invalidated and – again, as discussed yesterday – this is actually a strong bullish sign. Is the decline in the USD Index over and is the big slide in the precious metals sector just around the corner?

In short, that seems quite likely. Naturally, there’s much more to the precious metals market than just the USD Index and it’s prudent to analyze more factors than just this specific index. In other words, it is of utmost importance especially at this time, but there are many other important signs to keep in mind. Still, let’s start today’s analysis with the U.S. currency (charts courtesy of http://stockcharts.com).

1 fdfTCfC

In yesterday’s alert, we commented on the above chart in the following way:



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Currency

Best Currency Positions For April 2017

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Posted by Seeking Alpha

on Thursday, 23 March 2017 07:28

saupload life 2Bin 2Bin 2Ba 2Blight 2BbulbSummary

Here is a new list ranking currencies based on relative purchasing power. Overvalued and the least undervalued currencies are at the top. The most undervalued currencies are at the bottom.

This list is combined with a list of currencies ranked on differences in interest rate with the US. Based on these numbers, I discuss some carry trades.

Finally, I will discuss developments and opinions for a number of currencies with relative purchasing power in mind.

....continue reading HERE

....related:

Some Thoughts About The Recent Price Action

Summary

Dollar losses appear to be part of a larger adjustment in the capital market.

Yellen, Dudley, a reversal higher in the price of oil, and the passage of healthcare reform by the US House of Representatives could help underpin the dollar.

The dollar bloc has lagged in recent days.

The gains the US dollar scored last month have been largely unwound against the major currencies. The dollar's losses against the yen are a bit greater, and it returned to levels not seen late last November.

The downdraft in the dollar appears part of a larger development in the capital markets that has also seen the US 10-year yield slide 25 bp in less than two weeks.

...continue reading HERE

 

 



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Currency

A Look at the Yield Curve and Why the Fed Is Raising Rates

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Posted by Matthew Kerkhoff via Dow Theory Letters

on Friday, 17 March 2017 07:18

All attention is once again on Janet Yellen and the Federal Reserve this week, as the FOMC meets to determine whether an interest rate hike is warranted.

At this point, with Fed Funds futures prices pointing toward a 95% chance of a rate hike, an increase to the federal funds rate is a near certainty. But the implications and consequences of a rate hike are less so. Let’s dig into that further.

One thing I’ve noticed in speaking to investors is that there is often an inclination to group all interest rates together. When they hear about the Fed “raising rates,” many assume that interest rates across the board, for nearly everything, will rise. This couldn’t be further from the truth and warrants more explanation.

Interest rates come in all shapes, sizes and most importantly, maturities. That is, the length of the term over which money is borrowed, and therefore accrues interest.

Take US Treasuries as an example. If you want to loan the US government money, they’ll pay you a different interest rate based on the term of the loan. You can see today’s pricing for a few select maturities in the table below:

01

If we take these maturities and their respective interest rates and plot them on a chart, we end up with what’s known as the yield curve. You can see this as the red line in the chart below.



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Currency

Low Oil Prices Continue To Decimate Saudi Arabia’s Currency Reserves

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Posted by Steve St. Angelo - SRSrocco Report

on Wednesday, 15 March 2017 06:49

The low oil price continues to wreak financial havoc on the largest oil producer in the Middle East.  While the Mainstream press has published articles forecasting a rebound in Saudi Arabia’s financial outlook, due to higher oil prices this year, it seems like the Kingdom’s problems are just beginning.

In order to make up for falling oil revenues, Saudi Arabia has been liquidating its foreign currency reserves at a pretty good rate over the past two and a half years.  I discussed this in my article, Bankrupting OPEC… One Million Barrels Of Oil At A Time.  In that article I published this chart:

Saudi-Arabia-Foreign-Reserves-vs-Oil-Price-2012-2016-768x374

Due to the rapid oil price decline, Saudi Arabia liquidated 27% of its foreign currency reserves.  At its peak, Saudi Arabia held $797 billion in foreign currency reserves.  In just two and a half years, Saudi Arabia’s currency reserves declined $258 billion (U.S. Dollars) to $536 billion currently (Dec 2016).

I also published the following chart showing Saudi Arabia’s foreign currency reserves declined in 2016, even as the oil price recovered from a low of $30.7 in January to a high of $53.3 in December:



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Currency

Forex Trading Alert: USD/CAD at Fresh Highs

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Posted by Nadia Simmons & Przemyslaw Radomski - Sunshine Profitsadia Simmons - Sunshine Profitsski - Sunshine Profitsadia Simmons - Sunshine Profits

on Thursday, 09 March 2017 08:42

Forex Trading Alert originally published on March 8, 2016, 9:32 AM


Earlier today, the U.S. dollar extended gains against its Canadian counterpart as declining crude oil prices pushed the Canadian currency lower. As a result, USD/CAD reached the next resistance zone. Will it stop currency bulls in the coming days?

In our opinion, the following forex trading positions are justified – summary:

EUR/USD: short (a stop-loss order at 1.0735; the initial downside target at 1.0388)
GBP/USD: none, in other words, taking profits off the table is justified from the risk/reward perspective.
USD/JPY: long (a stop-loss order at 111; the initial upside target at 115.43)
USD/CAD: none, in other words, taking profits off the table is justified from the risk/reward perspective.
USD/CHF: long (a stop-loss order at 0.9891; the initial upside target at 1.0180)
AUD/USD: none

EUR/USD

43875 a large
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