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Posts Tagged ‘euro’

Another reason for Trump to be upset with UK

In Currencies on 17/07/2019 at 3:00 pm

After diplomatic cables in which the UK’s US ambassador said Tthe rump administration as “dysfunctional”, “faction riven” and “inept”were leaked, the Donald was mad. When Fox tells him that sterling has collapsed against the US$, he’ll be even angrier. Remember he was upset with the European Central Bank when it said it would take actions that analysts say would weaken the Euro. It’s only down 1%. 

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A sign Euro will rise?

In Currencies on 28/12/2016 at 2:24 pm

“Emerging market companies are increasingly choosing to borrow in euros rather than dollars as the spread between the yield on 10-year US Treasuries and German Bunds has widened to its highest level since the fall of the Berlin Wall. In the first eight months of 2016, EM non-financial corporates issued $38.1bn of euro-denominated bonds and syndicated loans, surpassing the highest ever full-year total of $33.4bn in 2013, according to FT analysis of data from the Institute of International Finance encompassing 20 major emerging market countries.”

FT

I’m reminded of all those who borrowed in US$ and who are being taken to the cleaners. Nothing new. I think of all the M’sian corporates who borrowed in yen in the 70s and 89s before the Plaza Accord.

But then US and Japan didn’t have a Le Pen around wanting to make France Great Again.

US$: Huat Ah

In Currencies on 08/01/2015 at 1:40 pm

EURO FALLS LOWER Down the euro goes. On Friday, Mario Draghi, the president of the European Central Bank, said in an interview with a German newspaper that the threat of deflation might force his bank to take more aggressive stimulus measures, which could include buying eurozone bonds in bulk, Landon Thomas Jr. and Jack Ewing report in DealBook. His comments prompted the euro to fall to $1.20, a four-and-a-half year low against the dollar.

The dollar also hit a multiyear high against the Japanese yen, and it was also gaining on the fragile currencies in Brazil, Turkey and Russia.

What does it all mean? The moves highlighted a new trend in world currency markets: Global central banks ‒ along with investors also wary of the low returns that their euros have been delivering ‒ have increasingly been switching into dollars and out of euros, Mr. Thomas and Mr. Ewing write. “The expectation is that a rapidly recovering United States economy will push the Federal Reserve to increase interest rates this year, making dollar-based assets more attractive than those denominated in euros, Japanese yen and emerging market currencies,” they write.

The weakness in the euro on Friday came after Mr. Draghi, in an interview in Handelsblatt of Germany, said, “The risks of not fulfilling our mandate of price stability are in any case higher than they were six months ago.” Investors interpreted Mr. Draghi’s comments to mean that the central bank was moving closer to broad-based purchases of government bonds, possibly as soon as its next monetary policy meeting, on Jan. 22.