USD 06 (Nov 15 - Dec 25)

[winston]

Trump just signaled the death of Clinton-era strong dollar policy

by Patti Domm

A strong dollar makes exports more expensive for foreign buyers.

The dollar index gained as much as 6 percent after the election but began retreating in early January and is now up only about 3 percent since Nov. 8.

Source: CNBC.com

http://www.cnbc.com/2017/01/17/trump-ju ... CD6,HBFR,1

[behappyalways]

料2019年底前　儲局每年加息數次
耶倫擺「鷹姿」美元發威
http://hk.apple.nextmedia.com/financees ... 0/19902901

[winston]

Here’s What to Do If Trump Kills The Dollar

by MICHAEL LEWITT

Source: Sure Money

http://suremoneyinvestor.com/2017/01/he ... /#deeplink

[winston]

There’s a perfect storm coming for the dollar, says chief currency strategist

by Gemma Acton

The dollar's 30 percent appreciation between the summer of 2014 to the end of 2016 demonstrated that there is already a lot of optimism priced in.

Source: CNBC

http://www.cnbc.com/2017/01/24/theres-a ... CKW,I35J,1

[winston]

Why the USD will go on rising

By Kang Wan Chern

“The market still believes that inflation will pick up as the US economy picks up under Trump. You don’t want to stand in the way of the USD when financial markets are in this belief stage.”

Bloom forecasts a further 5%-7% appreciation in the USD versus other currencies until end-June, after which the currency’s rally should start to taper.

Source: The Edge

http://smr.theedgemarkets.com/article/w ... 0-87358173

[winston]

Strong or Weak USD ?

First, it's highly unusual for the U.S. President to comment on the dollar. The Fed doesn't even comment. If they do it's in an indirect way. It has always been a topic deferred to the Treasury Secretary. And the consistent message there has been, for a long time, that we are for a strong dollar.

Things have changed. Or have they? In mid-January, President Trump told the Wall Street Journal that the dollar was "too strong."

The markets have had a hard time trying to reconcile this comment and stance taken by the administration. But we have to keep in mind: Let’s just say the new president has been a bit less measured in his words.

When the Fed is in a hiking cycle and other major central banks are still in QE mode. Capital will continue to flow into the U.S. and you're going to get a stronger dollar.

When you incentivize U.S. corporates to repatriate a couple trillion dollars they have offshore, you're going to get a stronger dollar.

When/if you pop growth to 4%, you're going to get higher rates, faster, and you're going to get a stronger dollar (especially when that growth will lead the rest of the world).

So what is this jawboning about the dollar all about?

As we know, Trump has had an early focus on trade. And he's used displeasure with trade deficits with countries as a bargaining chip to start conversations about more fair trade terms.

But while many have been pulled into the fray over the past few weeks (like Canada, Mexico, the euro zone, etc), this is all about China. My guess is he's using Mexico as an example for China.

We've heard a lot about the $60 billion trade deficit Mexico. It is our third largest trading partner. The deficit is peanuts when compared to China. Same can be said for Japan, Germany and Canada, three of our other largest trade partners. With China, however, we buy about $483 billion worth of goods. And we sell them only about $116 billion. That's a $367 billion deficit.

The problem is, it never corrects. It continues, and will continue, unless dealt with. Currencies are the natural trade rebalancer. And with China, it doesn't happen because they outright dictate the exchange rate. The cheap currency has been/and continues to be its economic driver--and it's a unfair competitive advantage that has crippled the global economy over time.

Consider this: Over the past 20 years, China’s economy has grown more than fourteen-fold! … to $10 trillion. It’s now the second largest economy in the world. During the same period, the U.S. economy has grown just 2.5x in size. And in the process a global credit bubble was formed.

China sells us goods. We give them dollars. China takes our dollars and buys U.S. Treasurys, which suppresses U.S. interest rates and incentivizes borrowing, which fuels more consumption. And the cycle continues.

Source: Forbes

[winston]

not vested

What Would Make Dollar Great Again?

By Shuli Ren

As U.S. President Donald Trump talks tough on trade and the dollar, the U.S. Dollar Index has already slipped 2.3% this year, frustrating a 3-year rally. The Powershares DB US Dollar Index Bullish Fund (UUP) has fallen 2.5%.

What would make dollar great again?

Morgan Stanley named 3 factors:
1. the Bank of Japan,
2. the People’s Bank of China and
3. the Federal Reserve.

The bank wrote:
For the USD to strengthen again we see the BoJ underlining that it maintains its yield curve-managing approach. Upcoming Rinban operations are in focus.

Should these operations remain insufficient to manage JGB volatility on the back end of its curve, then USDJPY is likely to break lower clearing out speculative positioning.

The RMB fixing will be important too. Should China’s authorities push the RMB higher against its basket, the USD would come under additional selling pressure.

Last but not least, all eyes will be on the Fed, whose latest statement left the impression that it is not in a rush to steer rates higher despite acknowledging that inflation ‘will’ reach 2%, suggesting that it may aim for lower real rates.

President Yellen’s testimony on February 14 may turn out to be a substantial risk event.

But Friday’s news flow doesn’t bode well for the dollar.

First, the Bank of Japan offered to conduct timid bond purchases, sending its 10-year government bond yields soaring. The Japanese yen is more valuable if investors can get higher interest rates in Japan.

Second, on the first working day after a long Chinese New Year holiday, the People’s Bank of China raised lending interest rates it offers to banks, sparking fears that China may be starting a tightening cycle. Higher interest rates in China help prevent capital outflow and prop up the yuan too.

As for the Fed, the FOMC seemed non-committal on rate hikes at this week’s meeting.

Asian currencies have done well this year. The Australian dollar has already rallied 6% on record trade surplus and soaring copper prices, the New Zealand dollar is up 4.8%, the Korean won has gained 5%, and the offshore Chinese yuan has risen 2.2%.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... eat-again/

[winston]

This Could Be the Best Contrarian Trade of 2017

By Joseph Hogue

Too many investors are piling into the dollar bet against factors that could push the greenback lower this year.

Source: Street Authority


http://dailytradealert.com/2017/02/04/t ... e-of-2017/

[winston]

Why JPMorgan Is Bearish On The Dollar

By Shuli Ren

J.P. Morgan’s end 2017 forecast for the Yen is 99. The consensus forecast is 117. Our non-consensus forecast is based on:
“U.S. protectionism led to a decline in Japan’s trade surplus, but USD/JPY declined substantially first; confrontation tends to hurt the dollar more through concerns about investability than it helps through a potential change in trade balance.”

J.P. Morgan’s end 2017 forecast for the Euro is 1.15. The consensus forecast is 1.05.
Our nonconsensus forecast is based on: “trade tensions under the Trump Administration might undermine the currency’s status as a reserve asset”

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... he-dollar/

[winston]

The US dollar is becoming a problem

by Tina Wadhwa

The dollar on a global trade-weighted basis has strengthened by about 20-25% over the course of the last year.

In the weeks following Trump's presidential victory, the dollar had one of its sharpest rises ever against a basket of peers — and is now up more than 40% from its 2011 low.

Proposed policies of tax cuts, fiscal stimulus, and increased infrastructure spending make way for furthering tightening by the Federal Reserve.

Trump's proposed policies of repatriation of profits and restriction of free trade are also dollar positive.

Moreover, central banks around the world, in particular, the European Central Bank and Bank of Japan, continue to pursue quantitative easing strategies and more accommodative monetary policies.

It also makes exports more expensive for foreign buyers, and can, therefore, hurt large multinational corporations that export a large amount of goods overseas.

A strengthening dollar tends to squeeze exports and suck in imports, widening the trade deficit.

According to the Bank of International Settlements, dollar-denominated debt amounted to $10 trillion last year. As the dollar strengthens, so the does the cost of servicing those debts.

Source: Business Insider

http://finance.yahoo.com/news/us-dollar ... 00178.html