Latest Posts

  • Raising the White Flag

    Aug 13, 2008 / 3:56pm / in Eastern Europe, General, Interest Rates, News Releases, Western Europe, Forex News

    It is not easy for many to admit that they made an error. It seems the President Trichet might finally be starting to embark on that difficult path. After raising rates in the Euro-Zone over the protests of many top figures within that continent, Trichet finally admitted what the rest of the world had realized some time ago: the Euro-Zone’s growth prospects are weak. This announcement/confession reflects that the ECB is starting to question if it did the right thing in raising rates.

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  • The Calm Before the Storm

    Jul 31, 2008 / 4:00pm / in Americas, Economics, General, News Releases, United States Dollar, Forex News

    Tomorrow is the one for all the marbles. The single most important economic announcement for the USD takes place tomorrow: Non-Farm Payrolls (NFPs). Despite today’s very important announcement of US GDP for Q2, the EUR/USD essentially stood pat around 1.56. What is special about NFPs is that, unlike announcements such as rate decisions or GDP results, predicting the outcome is often like finding a needle in a haystack. The unpredictability of this announcement, coupled with its importance, generally make it the largest “market-moving” announcement for the USD.

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  • Playing with Fire

    Jul 28, 2008 / 4:30pm / in Asia, Economics, General, Forex News

    One of the popular predictions of the past few years has been to declare China as the next world superpower. The most populated country in the world has experienced tremendous growth for some time, and given their size, growth, and stability, many view China as the United States’ next competitor for worldwide dominance. While I am not speculating as to China’s social or political future, I strongly believe that their growth-oriented policies will eventually — and inevitably — bring about economic consequences.

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  • A Truly Global Market

    Jul 21, 2008 / 3:20pm / in Asia, Eastern Europe, Economics, General, Middle East, South Pacific, Forex News

    Many in recent years have pointed to a “global market” that has emerged in the past few decades. While this term is typically a reference to increased global trade and international economic cooperation, the expression is also becoming applicable to the status of the world’s economy. After several years of widespread economic boon, it is becoming clear that the status has shifted. This has occurred not solely in economic powerhouses such as the U.S., the Euro-Zone, and Great Britain, but in many of the emerging markets throughout the world.

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  • Random Country Report: Part 3 - Hungary

    Jul 16, 2008 / 5:18pm / in Eastern Europe, General, Western Europe, Forex News

    One of the interesting aspects about today’s country in the Random Country Report is its youth; the country abandoned communism less than twenty years ago. Hungary, like many of neighbors, is a relatively young republic, and while many countries have had centuries to adapt to capitalism, Hungary has had about eighteen years to acclimate to a free market. Considering that with the fall of communism, Hungary lost — seemingly overnight — access to about ¾ of its export market, one has to be impressed with the strides that the country’s economy has taken.

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  • Too Big, or not Too Big: That is the question!

    Jul 14, 2008 / 4:17pm / in Americas, Economics, General, Forex News

    Many people involved with the market are adamantly opposed to any actions justified by the term “too big to let fail.” In capitalism, a company should be able to experience without interference both the profits and the losses that come with business. In theory, if a company has placed itself in a position where there is a possibility of failure, so be it; the company will have to deal with the consequences of their mistakes. The notion that the government — posing as a white knight — will ride in and rescue the company from danger is a thought that repulses many market followers.

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  • End of the World Trade

    Jul 2, 2008 / 4:16am / in Americas, derivatives, International Investing

    I asked one investment banker what might cause half of North America’s top corporations to default. No ordinary economic recession or natural disaster short of an asteroid strike could do it: no hurricane, for example, and not even ‘the big one’, a catastrophic earthquake devastating California. All he could think of was ‘a revolutionary Marxist government in Washington’. That’s not a likely scenario, yet the cost of insuring against it had shot up ten-fold. Normally one can buy $10 million of end-of-the-world insurance for between two and three thousand dollars a year.

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  • What’s Next?

    Jun 30, 2008 / 4:11pm / in Eastern Europe, Fundamental, General, Interest Rates, Western Europe, Forex News

    With this week’s ECB’s decision all but official, a more important question looms: what’s next? The ECB is a bank whose primary focus — witnessed in both its charter and its past actions — is price stability. Despite poor economic performance in recent months, the ECB essentially has to raise rates this week, as the Euro-Zone’s current inflation level is double the target of 2%. While President Trichet and his peers may pray that a single, small hike will be enough to curb rising inflation, the more likely scenario is that the policy move will not have a huge effect.

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  • Random Country Report: Part 2 - Egypt

    Jun 27, 2008 / 12:32pm / in Africa, Fundamental, General, Interest Rates, News Releases, Forex News

    The markets are closed, Wall-E is opening in theatres, and by now most people have at least a foot out the door for the weekend. After writing all week about the USD, the Fed, and about how I am a better forecaster of market movements than my colleague John, I have decided to do the second piece in the Random Country Report Series. Excluding Antarctica and its rather inactive central bank (please see below), the continent with the least amount of coverage in the world of foreign exchange is Africa.

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  • Random Country Report: India Revisited

    Jun 23, 2008 / 12:57pm / in Asia, General, Interest Rates, News Releases, Forex News

    My assignment for the day: write 200 times “Next time I will not get too excited when I write about India’s short term economic situation.” For those who have been following India in the past few days, the developments seem anything but the rosy picture I painted last time around. Sure, in the long run, India is still poised to have solid and sustainable growth. However, their current battle with inflation may be more than just a bump in the road.

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