In our previous commentary on the US dollar, we wrote that the buck was set to rise further thanks to our forecast for slowing US growth and inflation. Given the US dollar’s safe haven qualities, the currency performs the best when economic conditions deteriorate. Following the publication of our last commentary, the performance of the US dollar index (a measure of the currency against major pee…

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In our last commentary on the US dollar, we wrote that the buck was set to move higher given underlying economic trends. Specifically, US growth and inflation was likely to keep accelerating, while the opposite was likely to happen in most major regions outside the United States. Following the publication of our last commentary, the US dollar index has strengthened from around 91.80 to around...

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In our previous commentary on the US dollar, we warned that a weak dollar was hiding significant risks in growth-sensitive assets such as equities and European currencies. As the world’s reserve currency, the buck is inversely correlated to most financial assets because most cross-border lending is conducted in dollars. Thanks to a slowdown in economic growth outside the United States coupled wit…

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In our previous take on the US dollar in early February, we wrote that the currency was set to remain weak. At the time, ex-US growth was accelerating, while speculator sentiment was only mildly bearish. While dollar bulls have argued that rate hikes should help the currency, we wrote that expectations for monetary tightening were rising around the world, limiting the impact from the Fed’s action…

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The US dollar currency index, a measure of USD against six major peers, declined by 9.9% in 2017. Last month, the currency index continued declining and fell by another 3.3%. Given the speed of the recent decline, the US dollar started looking oversold according to technical indicators around mid-January. While we warned that the currency was looking oversold in several recent editions of our US …

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Looking at this week’s Commitments of Traders Report, bullish extremes continue in long crude oil, the euro and the British pound. Net long positions have also grown this week for the two currencies and the commodity. The purpose of this report is to track how the consensus is positioned across various currencies and commodities. When net long positions become crowded in either direction, we fla…

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The world runs on US dollars, and the ongoing boom is impacting USD liquidity, gold and eurodollar markets. Our US dollar forecast calls for the currency to continue weakening. leaving dollar bears to wonder if they should jump in now, or wait for better conditions.

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With US dollars again in short supply, eurodollar borrowing has expanded - but is this an indicator of bigger problems ahead? We revisit the role of the eurodollar market in the 2007 financial crisis, why major banks continue to engage in trading eurodollars, and if it's time to ring the alarm bells.

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Following weak inflation figures and no change in guidance from the Federal Reserve, reactions in the US dollar have been fairly predictable. As the threat of aggressive rate hikes fade, falling US interest rates have pushed the US dollar lower. On a day-to-day basis, a lot of currency movements can be explained by changes in relative interest rates. When trading over a short-term time horizon, l…

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Following the Senate tax vote late last Friday, the US dollar rallied on Monday morning as markets raised their expectations of tax cuts becoming reality. The most inflation-sensitive pairs, such as USD/CHF and USD/JPY, enjoyed the biggest rallies. While initial momentum was strong, the dollar gave up a big portion of its gains later in the day. Looking at USD/JPY, the pair strengthened above 113…

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