Market News

Oh my, it looks like the euro is poised for more losses in the days to come. Apparently, news broke out yesterday that credit rating agency Standard & Poor had had enough of Greece’s shenanigans and decided to downgrade the country’s sovereign debt rating to… wait for it… Junk!

It ain’t over yet for Greece! News broke out yesterday that the IMF needs to provide another 10 billion EUR to Greece to bail it out of its predicament. This heightened risk aversion to extreme levels, taking the dollar higher across the board.

The only question we have is whether or not the euro goes to par quickly on some type of Eurozone crisis, or just grinds lower and lower in the months ahead. Either way, we want to remain positioned short the euro against the dollar and ride this move for all its worth. This research piece lays out the key reasons why we are confident in that view.

In their statement later this week, the FOMC is expected to keep interest rates at their current levels… No surprises there! Can we expect something new this time around? More hawkish comments, perhaps?

Don’t forget to check what’s on today’s economic front. Go ahead and see my daily economic roundup!

Our longer term dollar call for a while now is simply this: The US dollar entered a multi-year bull market after bottoming in March 2008. If that proves correct, it is likely we will witness some major changes in correlations that seemed to be such layups during the US dollar 7-year bear market phase.

With the Reserve Bank of New Zealand releasing its interest rate statement tomorrow, will the central bank join its com-doll brothers and sisters and break its commitment to keep rates steady till mid-2010? Or will it continue to lag behind and maintain its dovish stance?

Rate decisions, GDP releases, and inflation reports… It seems like there’s a lot of economic happenings to look forward to this week. It’s gonna be legendary!

Milton Friedman said, “a central bank can control its exchange rate, it can control its interest rates, and it can control its money supply/inflation. But it can’t control all three at the same time.”

Oh my, is this another Greek tragedy in the making? With the euro making another set of year to date lows versus the dollar, what could be in store for us today?

At least that’s how part of a Reuters headline reads this morning, referencing the latest IMF report released this week.

While the US and euro zone have been posting notable improvements in their own GDP accounts, the UK barely managed to crawl out of the recession with a mere 0.4% growth during the last leg of 2009. Would they be able to keep this up for another quarter? The upcoming preliminary GDP report should give us an idea.

It looks like the US dollar found some stability and support in yesterday’s trading session. Will the large amount of data coming out from the US turn out to be good for the dollar?

Gradually put in place a managed floating exchange rate system. Apparently that’s what Chinese President Hu Jintao said in a speech at a BRIC summit last week. Smooth, huh?

You’re going to hate me for saying this but… I told you so! I’ve been raving about the strength of Canada’s economy for quite some time now, and it was really just a matter of time before the BOC came out with a really hawkish interest rate outlook.

Good day Forex peeps! See what’s on the economic front on my daily economic roundup!

Is bond worry all wet? I got caught up in the expectation of a surge in long bond yields, which hasn’t materialized. Being in the deflationary camp, it was a dumb assessment on my part. I think the perennial bond worry-warts have it very wrong again. For sustenance on our deflation view we turn to Van Hoisington and Lacy Hunt.

Is bond worry all wet? I got caught up in the expectation of a surge in long bond yields, which hasn’t materialized. Being in the deflationary camp, it was a dumb assessment on my part. I think the perennial bond worry-warts have it very wrong again. For sustenance on our deflation view we turn to Van Hoisington and Lacy Hunt.

At a loss why the Aussie rallied earlier today? Don’t ya worry, Forex Gump’s here to give you the latest scoop on what’s happening with the Aussie and the RBA!

Whew! The frenzy from last Friday’s fireworks seemed to die down yesterday. With today’s set of economic reports, is it time to turn the risk aversion switch back on? Read my roundup to find out!