Neal's Feed
Oct 14, 2014

Cheaper oil may see euro, yen fall

LONDON, Oct 14 (Reuters) – Falling oil prices might well
prove negative for the euro and the yen if the foreign exchange
market concludes cheap crude will undermine efforts to fend off
deflation in the euro zone and Japan.

With one facing deflation and one seeking to boost
inflation, they might ordinarily be expected to welcome a lower
oil price, which would lessen costs of production and increase
economic activity.

Oct 8, 2014

Short Swiss francs/long Mexico peso may yield returns

LONDON, Oct 8 (Reuters) – Selling the Swiss franc versus the
Mexican peso may not be an everyday foreign exchange play but
divergent economic outlooks coupled with a positive yield might
make it attractive to some forex traders.

Mexico’s central bank cut interest rates to a record low in
June, but at 3 percent that’s a world away from Switzerland’s
zero rate policy and the possible resort to negative interest
rates alluded to by the Swiss National Bank (SNB) on Sept.
29.

Oct 2, 2014

Japan banks’ dollar demand feeds yen weakness

LONDON, Oct 2 (Reuters) – The yen’s weakness against the
dollar may be extended because of the changing lending profile
at Japan’s major banks. The paucity of returns at home have led
them to increase their offshore loans, and they need dollars.

Declines in the value of the greenback versus the yen may
prove short-lived, albeit uncomfortable for forex traders who
have placed bets the other way.

Sep 2, 2014

A stronger Canadian dollar in the pipeline?

LONDON, September 2 (Reuters)- Over time, the Canadian
dollar might prove to be a winner from the conflict in Ukraine,
which has highlighted the European Union’s reliance on energy
supplies from Russia.

For a graphic of European dependence on gas from Russia: link.reuters.com/nah72w

Aug 29, 2014

Italy: no bella figura without a lower euro

LONDON, Aug 29 (Reuters) – If Italy is ever going to
recapture its glory days, it needs an even weaker euro and,
given its weight in the euro zone, it might just get it.

Forex traders may logically react to the gravity of Italy’s
economic and fiscal plight by selling the euro.

Aug 27, 2014

Weak yen remains Japan’s inflation anchor

LONDON, Aug 27 (Reuters) – Continuing and broad-based yen
weakness would sit comfortably with the objectives outlined by
Bank of Japan Governor Haruhiko Kuroda in his speech last week
at Jackson Hole, Wyoming.

For a text of Kuroda’s full remarks: here

The BOJ Governor said the mechanism for negotiating wage
increases “stopped working effectively” while Japan battled
deflation over the past two decades. He also said he wants to
“anchor inflation expectations at 2 percent” to act as a
benchmark for wage-setting.

Aug 20, 2014

Hollande thinks the euro’s overvalued, and he should know

LONDON, Aug 20 (Reuters) – French President Francois
Hollande said again on Wednesday that the euro is overvalued
and, looking at the state of the French economy, many might
agree with him.

France, the currency bloc’s second-biggest economy after
Germany, is afflicted by record-high jobless numbers, housing
starts at a 16-year low and waning industrial output.

Aug 11, 2014

Euro may give ground against the pound before BoE report

LONDON, Aug 11 (Reuters) – European Central Bank head Mario
Draghi’s words last week and what Bank of England chief Mark
Carney is likely to leave unsaid on Wednesday may combine to
push the euro lower against sterling in the coming days.

“The fundamentals for a weaker exchange rate are today much
better than they were two or three months ago,” Draghi said on
Thursday, referring to the external value of the euro.

Jul 23, 2014

Russia sanctions fear may see sterling dip vs Swissie

LONDON, July 23 (Reuters) – Sterling may have some room to
fall versus the Swiss franc if fear of tougher
sanctions sees Russian investors shift cash from Britain to
Switzerland.

Russian investors, who have poured capital into Britain,
notably into its high-end real estate, will have noted British
Prime Minister David Cameron’s call for new sanctions on Russia
in the wake of last week’s downing of a Malaysian airliner over
Ukraine.

Jun 18, 2014

Crude comparisons leave dollar in driving seat

LONDON, June 18 (Reuters) – The dollar should be the
ultimate beneficiary of the prolonged unrest in the Middle East
that has already seen the price of oil tick higher on fears of
supply disruptions.

Brent oil futures rose towards $114 a barrel on
Wednesday as heavy fighting in Iraq continued. Sunni militants
took control of most of Iraq’s second-largest oil refinery, an
official at the refinery said.

    • About Neal

      "From 1985-2009, I worked in foreign exchange trading and latterly sales in the City. Since joining Thomsonreuters in Sept 09, I write columns on currency issues for the wire, contribute briefer daily FXComments, co-host the "Dealing Room" chatroom with colleagues across the globe, and appear regularly on FX related Inside shows."
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