Has the USD peaked?
- Miguelito
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Has the USD peaked?
Amongst Brexit, internal struggles in Europe, and a growing domestic economy, the USD has been gaining for the past several years.
Has it peaked? It’s on a sudden downturn and with the news coming out of Washington I don’t see what will slow that...
Has it peaked? It’s on a sudden downturn and with the news coming out of Washington I don’t see what will slow that...
- Miguelito
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Here’s an article that is a bit gloomy:
ArticleThe spread between three-month and 10-year Treasury yields — a relationship known as the yield curve — on Monday inverted to its widest level since 2007.
At its most extended point, the spread reached -32 basis points. That's a worrisome sign for economists and traders alike, considering such an inversion has preceded every US recession of the past 50 years.
And while the relationship has been in negative territory for months now, it's the severity of Monday's shift — and the reasons for it — that have traders on high alert.
This latest escalation was spurred by the Chinese central bank's decision to let the yuan slide below a key threshold versus the US dollar. China also said it would cease importing US agricultural products.
Paired with President Donald Trump's announcement that he'll expand tariffs to virtually all imports from China starting in September, it was the perfect mix of bearish headwinds. Stocks responded in kind, selling off sharply and posting their worst day of 2019.
In terms of the curve itself, the widening spread was driven more by a decline in the 10-year than an uptick in its three-month counterpart. The 10-year yield is at its lowest level since October 2016 and has been pushed lower as risk-averse investors have purchased Treasurys. The Federal Reserve's continued monetary easing efforts have also played a role.
In new research published Monday, Morgan Stanley agreed with the idea that increased trade-war tensions could hasten a recession. Chetan Ahya, the firm's chief economist, said a global recession could be on the horizon in nine months.
In the meantime, investors are left to wonder what the latest trade escalation — and the deepening of the yield-curve inversion — will mean for the Fed's future rate decisions.
The UBS economist Seth Carpenter said Monday that more tariffs would slow the economy and make cuts easier to justify. By his estimation, tariffs will take about 25 basis points from US gross domestic product from the fourth quarter of this year through 2020.
"Powell has been arguing for a cut based on the risk associated with tariffs; now that escalation is real, his case will be easier to make to the skeptics on the FOMC," Carpenter wrote.
Not yet please, still funneling Benjamins to the UK at an absurd rate - have faith in the Donald!!
Meum est propositum in taberna mori,
ut sint Guinness proxima morientis ori.
tunc cantabunt letius angelorum chori:
"Sit Deus propitius huic potatori."
ut sint Guinness proxima morientis ori.
tunc cantabunt letius angelorum chori:
"Sit Deus propitius huic potatori."
- Sonic1
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I am more curious to the riel's reaction to the yuan's rise of late. Which currency is the riel more closlely tethered to, the dollar or the yuan? Given the state of tariff negotiations you can expect the yuan to continue to rise. https://www.cnbc.com/2019/08/07/chinese ... ofaml.html
Freedom is not a state. It is an act. It is not some enchanted garden perched high on a distant plateau.. Freedom is a continuous action we all must take, and each generation must do its part to create an even more fair, more just society.-John Lewis
Eh?Sonic1 wrote: ↑Thu Aug 08, 2019 4:34 pmI am more curious to the riel's reaction to the yuan's rise of late. Which currency is the riel more closlely tethered to, the dollar or the yuan? Given the state of tariff negotiations you can expect the yuan to continue to rise. https://www.cnbc.com/2019/08/07/chinese ... ofaml.html
Yuan is a centrally controlled currency. It's just been devalued to below 7 a dollah.
Trade war etc.
As for the dollah, I kin hope so. Getting squeezed on a sterling income.
- Sonic1
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the yuan is above 7 to the dollar heading to 7 and a half. China actually held the yuan down to control capital from leaving before allowing it to rise.. There is so much liquidity in the market the dollar will falter when the eonomy does. Probably not much in the short term.RobW wrote: ↑Thu Aug 08, 2019 5:22 pmEh?Sonic1 wrote: ↑Thu Aug 08, 2019 4:34 pmI am more curious to the riel's reaction to the yuan's rise of late. Which currency is the riel more closlely tethered to, the dollar or the yuan? Given the state of tariff negotiations you can expect the yuan to continue to rise. https://www.cnbc.com/2019/08/07/chinese ... ofaml.html
Yuan is a centrally controlled currency. It's just been devalued to below 7 a dollah.
Trade war etc.
As for the dollah, I kin hope so. Getting squeezed on a sterling income.
Freedom is not a state. It is an act. It is not some enchanted garden perched high on a distant plateau.. Freedom is a continuous action we all must take, and each generation must do its part to create an even more fair, more just society.-John Lewis
You are right. It's above 7 at 7.04.Sonic1 wrote: ↑Thu Aug 08, 2019 5:48 pmthe yuan is above 7 to the dollar heading to 7 and a half. China actually held the yuan down to control capital from leaving before allowing it to rise.. There is so much liquidity in the market the dollar will falter when the eonomy does. Probably not much in the short term.RobW wrote: ↑Thu Aug 08, 2019 5:22 pmEh?Sonic1 wrote: ↑Thu Aug 08, 2019 4:34 pmI am more curious to the riel's reaction to the yuan's rise of late. Which currency is the riel more closlely tethered to, the dollar or the yuan? Given the state of tariff negotiations you can expect the yuan to continue to rise. https://www.cnbc.com/2019/08/07/chinese ... ofaml.html
Yuan is a centrally controlled currency. It's just been devalued to below 7 a dollah.
Trade war etc.
As for the dollah, I kin hope so. Getting squeezed on a sterling income.
I'd still expect it not to rise fast with the trade shenanigans though.
Edit: And I'm all back to front.
I'd expect it to remain weak against the dollah.
Apols. Fixing me hangover.
- spitthedog
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Alot of Government bonds (prices not yields) seem to have been going up big time over the last few months.
Austria's 100 year bond price, for example, is up something like 80 percent over the last year.
And quote : "Over 50% of European gov't bonds have a negative yield. Globally there's $15 trillion in negative-yield debt"
So the U.S bond market chart looks like it's panicking about the economy, but how long will people keep pumping money into Austria etc bonds, WHILST most central banks continue to ease/pump out the cheap money?
So maybe bond spreads just got too wide and there is no real panic.......YET?
Austria's 100 year bond price, for example, is up something like 80 percent over the last year.
And quote : "Over 50% of European gov't bonds have a negative yield. Globally there's $15 trillion in negative-yield debt"
So the U.S bond market chart looks like it's panicking about the economy, but how long will people keep pumping money into Austria etc bonds, WHILST most central banks continue to ease/pump out the cheap money?
So maybe bond spreads just got too wide and there is no real panic.......YET?
"I don't care what the people are thinking, i ain't drunk i'm just drinking"
Why would the US dollar fall when practically every other major nation has had negative interest rates for quite some time and the US still has positive interest rates...even if the Fed obeys Trump and drops interest rates by one full percent, which they won't? Why would any sane person pay a bank in the EU to store their own money when the US will still pay you some interest for your T-bill purchase?
- springrain
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But Gold had gone about as low as it could go. A few months of realignment hardly constitutes a 'bull run'. It is merely a temporary correction and will fluctuate slightly between narrow bounds. Even so far this month, it has dropped from a high of around 1550 to about 1508 USD/OZ. (9PM Monday, 9th September, 2019.) I'd order a short position at 1598 in case it goes for a tip & run.
'History is a set of lies agreed upon.'
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Attributed to Napoleon
- newnewnewbie
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