Sunday, July 31, 2016 4:13:13 PM
man of a few more words, GDP & DXY.
GDP report of 1.2%, about 1/2 of expected, reversed the the U.S. $ charge upward. Likely partly due to more than just pure economic data - likely because it just about guarantees the Fed hike is off the table for this year, which would have led to U.S. $ strengthening if the hike was expected.
So we switch again from making stronger headwinds to abating headwinds, maybe enough this time to become at least a somewhat neutral factor or even a minor tailwind down the road. I think we'd need to see DXY around those August '14 prices though to consider it a good tailwind.
The Euro won't help - there are some calling for parity (1:1) with the U.S. $ down the road, so the EZ could/would(?) still be a battle to get growth there back to decent levels. Currently EUR/USD 1.1174.
'Course we can never tell with them due to the "crises du jour". 3/13/2015 it was 1.0496 and has been to that sort of level twice subsequently. My how the mighty fall, from up around 1.3875 on 5/5/2014, when they are not "taking care of business" (literally!) as quickly (and corruptly?) as the U.S. did. But now that they are directly buying corporate issuance ...
This snapshot was made on one of my other computers with different hardware, display resolution, OS, ... so it looks a bit different. I added another trend line too.
The current chart:
The prior chart:
Bill
GDP report of 1.2%, about 1/2 of expected, reversed the the U.S. $ charge upward. Likely partly due to more than just pure economic data - likely because it just about guarantees the Fed hike is off the table for this year, which would have led to U.S. $ strengthening if the hike was expected.
So we switch again from making stronger headwinds to abating headwinds, maybe enough this time to become at least a somewhat neutral factor or even a minor tailwind down the road. I think we'd need to see DXY around those August '14 prices though to consider it a good tailwind.
The Euro won't help - there are some calling for parity (1:1) with the U.S. $ down the road, so the EZ could/would(?) still be a battle to get growth there back to decent levels. Currently EUR/USD 1.1174.
'Course we can never tell with them due to the "crises du jour". 3/13/2015 it was 1.0496 and has been to that sort of level twice subsequently. My how the mighty fall, from up around 1.3875 on 5/5/2014, when they are not "taking care of business" (literally!) as quickly (and corruptly?) as the U.S. did. But now that they are directly buying corporate issuance ...
This snapshot was made on one of my other computers with different hardware, display resolution, OS, ... so it looks a bit different. I added another trend line too.
The current chart:
The prior chart:
Bill
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