currencies posts
FeedPosted Nov 5th 2009 4:30PM by Connie Madon (RSS feed)
Filed under: India, China, Brazil, Russia, Market matters, Money and Finance Today, Federal Reserve
The US dollar is down 20% since 2002 on a trade weighted basis. Other world economies like China are dynamic, with growth rates of 8 and 9%. With that kind of clout, countries like China, India and Brazil, can choose where to place their reserves.
Slowly, developing countries are shifting their reserves away from the dollar into the euro and yen. Neil Mellor, strategist at Bank of New York Mellon Corp (NYSE: BK), which has some $20 trillion dollars in assets under custody said: "I don't think there will be an imminent move, but it is quite clear there's a plan to shift reserves to a more balanced portfolio."
Barclays Capital Research reported that central banks placed 63% of new cash in non US currencies between April and July.
Continue reading Central Banks lead a shift away from the dollar
Posted Oct 13th 2009 3:10PM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Federal Reserve

Investors have probably heard Obama administration officials, like previous Bush administration officials –- and just about every other administration since 1981 -- rattle off the mantra,
'The United States is committed to a strong dollar' even as the dollar continues to weaken. What's going on here?
Well, first: the currency market, long-term, emphasizes actions, not words, and current U.S. public policies do not support the dollar. To strengthen it, the U.S. must cut its trade deficit, eliminate the budget deficit, and get the U.S. economy growing at an adequate rate again.
Continue reading What does the U.S. mean when it says it 'supports a strong dollar' ?
Posted Sep 28th 2009 5:40PM by Michael Fowlkes (RSS feed)
Filed under: International markets, Earnings reports, Forecasts, Products and services, China, Market matters, NIKE, Inc'B' (NKE), Recession, Financial Crisis
Nike Inc. (NYSE:
NKE) will get its chance to impress Wall Street when it reports its most recent quarterly results Tuesday following the market close. The company will be reporting its fiscal first quarter numbers, and analysts are expecting
slightly lower numbers that its first quarter last year.
The giant in sports apparel and footwear last reported earnings back on June 24 when it was able to outpace analyst estimates, and this time around analysts are looking for the company to show earnings of 97 cents per share. In its first quarter last year, the company reported earnings of $1.03 per share.
Continue reading Nike Q1 earnings preview
Posted Feb 17th 2009 2:30PM by Connie Madon (RSS feed)
Filed under: International markets, Economic data, Eastern Europe, Financial Crisis

When we think of currencies the key ones that come to mind are the British Pound, the euro, the yen and the Swiss franc. However, sometimes it pays to give notice to lesser traded currencies like the Polish zloty. Why? Since the world is interdependent what happens in one country can affect a larger group of countries.
Such is the case with the Polish zloty. The zloty hit its weakest level since joining the European Union. This is especially disappointing since plans are underway for Poland to adopt the euro in 2012.
So far this year the zloty has fallen 14% against the euro amid fears that Poland will find it difficult to finance its current account deficit. The situation is further aggravated because Poland is an export driven economy and exports have fallen off sharply.
Posted Jan 13th 2009 4:40PM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Other issues

The U.S. Federal Reserve continues to expand its balance sheet. Further, the U.S. government is piling on debt and public borrowing at almost a faster rate than Mexico and Argentina did during "the bad old days" decades ago.
And yet the dollar continues to hold its own against most of the world's other major currencies. The
dollar strengthened about 2 cents against the
euro and
British pound Tuesday at mid-day, to $1.3190 and $1.4538, respectively. Just as significant, the dollar has strengthened about 11% versus the euro and about 22% versus the pound since October 2008.
Big factor: first in, first out
What's going on here? BloggingStocks asked economist Peter Dawson to provide some clarity.
"Three factors are at work. Most important is the economic cycle. The U.S. was the first to enter a recession and it will likely come out of it sooner than Europe and the U.K., so that's supporting the dollar," Dawson said. "Second, there's still considerable flight-to-safety by stock-shy investors, which almost always increases purchases of U.S. Treasuries, another dollar plus."
Continue reading Dollar, despite budget deficit, quantitative easing, is still holding its own
Posted Jan 5th 2009 10:15AM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Forecasts

Record-high U.S. budget deficit? Declining corporate earnings? Unemployment likely to rise through at least May?
Don't mention those potential scenarios to the foreign exchange, as currency traders sent the dollar rocketing higher versus the euro early Monday, up 3 cents -- an enormous move in the currency market -- on the belief the Obama Administration's fiscal stimulus package will help the U.S. economy recover from the recession.
The
dollar strengthened 3 cents to $1.3566 versus the
euro and rose 1.64 yen to 93.50 versus
Japan's yen. The dollar has rose 3 cents to $1.1097 versus the
Swiss franc, and strengthened about one-half cent to $1.4494 versus the
British pound.
Currency trader Andrew Resnick told BloggingStocks Monday trading desks are back at full strength after the holiday and they're clearly signaling that they expect the worst of the U.S. recession to be over by mid-year.
Continue reading Dollar rockets higher vs euro, yen on Obama fiscal stimulus plan
Posted Dec 21st 2008 9:10AM by Connie Madon (RSS feed)
Filed under: International markets, Federal Reserve, Financial Crisis
The Federal Reserve lowered interest rates to near zero last week. That in itself may have been enough to restore confidence in our economy. But Ben Bernanke took the boldest step ever. He topped this off by buying Treasury securities and creating money like a drunken sailor. He says this needs to be done. Whether or not he's right remains to be seen.
Much of what happens in the foreign currency markets is a matter of perception. Traders for central banks around the world make their decisions to buy or sell a currency based on the actions of the government that the currency represents. For this reason many world governments viewed Ben Bernanke's actions to create such piles of money as a walk on the wild side and decided to sell dollars. How far the Federal Reserve goes in printing money is anyone's guess. We have to keep in mind that, except for a few periodic reports to Congress, there are virtually no checks and balances on the Fed. They were intended to operate as a separate entity apart from any branch of government. Meanwhile, the fate of our economy and to some extent the world economy is in the hands of Ben Bernanke and his merry men.
Posted Dec 12th 2008 11:50AM by Joseph Lazzaro (RSS feed)
Filed under: International markets, Other issues, Ford Motor (F), General Motors (GM), Politics, Recession

The dollar plunged to a 13-year low against Japan's yen Friday, as currency traders sensed a further-deteriorating U.S. economy on the heels of the U.S. Senate's rejection of the Big Three rescue package.
The
dollar plunged more than 3 yen -- an enormous move in the currency market -- to 88.40 early Friday before recovering slightly to 89.50
yen. The dollar also fell about one-quarter cent versus the
euro to $1.3375 and one-half cent versus the
Swiss franc to $1.1785.
Currency Trader Andrew Resnick told BloggingStocks Friday traders sense that U.S. stock investments will perform even worse now in 2009, as a disruption / cessation of operations by
General Motors (NYSE:
GM),
Ford (NYSE:
F), and Chrysler will further decrease commercial activity, and GDP -- making U.S. investments less attractive.
"Currency traders are running for the hills now. They're running out of U.S. investments, which is bearish for the dollar. The yen is rising primarily as a safe haven and as a risk-aversion play, as it typically has during the financial crisis," Resnick said. "Japan's economy isn't that strong, it's in recession too, but as long as it doesn't contract as much as the U.S., traders will prefer the yen over the dollar," Resnick added that he was presently long with the yen versus the dollar, and long with the yen versus the euro.
Further, Resnick said he expects the dollar to fall to 75 yen, if public policy efforts aren't revived to save the U.S. auto sector.
Continue reading Dollar plunges to 13-year low vs yen after Senate rejects Big 3 bailout
Posted Dec 8th 2008 12:39PM by Brent Archer (RSS feed)
Filed under: Industry, McDonald's (MCD), Options, Technical Analysis
McDonald's (NYSE:
MCD -
option chain) shares opened higher today, but have dropped into the red after the company announced
November same-store sales growth of 7.7%, with US sales growing 4.5%. However, total sales only grew 1.9% when currency factors were included. Without currency fluctuations, total sales would have been up just under 10%. I for one like this company a tremendous amount in a weak economy, and even though the strong dollar is messing with the numbers, I think MCD is on solid ground. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MCD.
MCD opened this morning at $63.35. So far today the stock has hit a low of $60.86 and a high of $63.99. As of 12:15, MCD is trading at $61.37, down $1.35 (-2.1%). The chart for MCD looks bullish and
S&P gives MCD a positive 5 STARS (out of 5) strong buy ranking.
For a bullish hedged play on this stock, I would consider a January
bull-put credit spread below the $50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just six weeks as long as MCD is above $50 at January expiration. McDonald's would have to fall by more than 18% before we would start to lose money. Learn more about this type of trade
here.
MCD hasn't been below $50 at all except for one day in the past year and has shown support around $55 recently.
Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent owns and controls bullish hedged positions in MCD.Next Page >