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Special Reports

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Swiss franc shines bright, but will SNB clip its wings? – Special report

Posted on September 12, 2023 at 2:19 pm GMT

Stellar year for Swiss franc, tied for best-performing major currency End to negative rates, FX interventions, and safety flows helped Next week’s SNB decision and risk tone could decide franc’s fate Flying under the radar Even though it hasn’t attracted many headlines, the Swiss franc has gone on a silent winning streak. It is virtually tied with the British pound as the top-performing currency of this year, while it has gained more than 3% against both the US dollar and [..]

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With clouds gathering over the UK economy, what’s next for the pound? – Special Report

Posted on September 6, 2023 at 3:20 pm GMT

Although the Bank of England is expected to keep raising rates for a while longer, the pound has lost decent ground lately against its US counterpart as traders seem to have been paying growing attention to growth dynamics. With underlying inflation more than three times the BoE’s 2% objective, will BoE policymakers stay keen to continue pressing the hike button or will they turn to a more cautious stance in order to safeguard the local economy? BoE slows down, but [..]

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Will the US dollar realign with its strong fundamentals? – Special report

Posted on September 6, 2023 at 2:16 pm GMT

It is crystal clear that the United States has the superior economy at this stage of the cycle, especially when compared to Europe or China. And yet, this economic strength has not translated into a full-scale US dollar rally. What’s the missing ingredient for that to change?  Growth differentials  There’s been a striking divergence in the performance of major economies this year. The United States is currently the bright spot. Economic growth seems to have accelerated over the summer and [..]

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Has euro/dollar entered a bearish trend or is it in a correction? – Special Report

Posted on September 6, 2023 at 12:17 pm GMT

With economic numbers out of the Eurozone heightening recession concerns, and US data keep pointing to a superior US economy, the euro/dollar pair has been in a sliding mode recently. ECB seen holding its fire next week At the last ECB meeting, policymakers raised interest rates by a quarter point, but they did not commit to further moves, with President Lagarde replying with a “decisive maybe” when asked whether they are planning to hike again in September. The fact that [..]

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How much trouble is China’s economy in and is there a risk for global contagion? – Special Report

Posted on August 24, 2023 at 3:16 pm GMT

China has long been the world’s growth engine, but that status is under threat as its economic recovery has hit a major stumbling block and the high-growth era seems to be well and truly over. Exports are falling, consumers aren’t spending much, bank lending is slowing and the crisis in the property sector only seems to be deepening. Can the Chinese government navigate its way out of this mess, which is partly its own doing, or is there more pain [..]

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How long can the euro ignore recession risks? – Special Report

Posted on August 24, 2023 at 1:56 pm GMT

The Eurozone economy seems to be rolling over. Business surveys paint an ugly picture, especially in Germany, where economic activity is already contracting. And yet, the euro has not absorbed any significant damage. What’s behind this FX resilience and is a ‘reality check’ imminent?  Storm clouds gathering It’s been a tough few quarters for the euro area economy. Rising borrowing costs have joined forces with the malaise in global manufacturing to put the brakes on economic growth, especially in Germany, [..]

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Is gold destined to lose more of its shine? – Special Report

Posted on August 22, 2023 at 12:50 pm GMT

With US Treasury yields and the dollar marching north, gold has come under selling interest, breaking last week below the key zone of $1,900. Although the short-term picture of the precious metal appears to have turned bearish, whether larger declines are in store will likely depend on Fed Chair Powell’s monetary policy remarks at Jackson Hole on Friday. US economy fires on all cylinders August appears to be a very hot month for US Treasury yields, with the 10-year climbing [..]

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Performance of key market instruments when the 10-year US yield rises above 4% – Special Report

Posted on August 18, 2023 at 7:58 am GMT

August is traditionally seen as a quiet month, but once again significant developments are taking place globally. In particular, the 10-year US yield has climbed decisively above the 4% threshold as market participants are scrambling to explain this move amidst a low liquidity environment. A quick look at market history could give us some valuable insight as to what the future holds for euro-dollar and other key market instruments. Significant developments everywhere The market has once again proven that it [..]

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Will Japan intervene to rescue the battered yen? – Special Report

Posted on August 16, 2023 at 1:10 pm GMT

The Japanese yen has resumed its meltdown, falling victim to widening rate differentials and rising energy costs. Despite the currency trading at levels that prompted FX intervention last year, Japanese authorities don’t appear so concerned this time, which suggests that another round of intervention is some distance away. For this dynamic to change, USD/JPY would need to approach the 150 region in a hurry.  Yen feels the blues It has been another bruising year for the Japanese yen, as the [..]

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Could July’s ECB rate hike curse reappear and cause significant euro underperformance until year-end? – Special Report

Posted on August 9, 2023 at 9:33 am GMT

The month of July tends to bring confusing memories for ECB followers due to the respective 2008 and 2011 meetings. Both rate hikes announced back then were eventually seen as policy mistakes with the ECB quickly forced to subsequently ease monetary policy afterwards. Are there any similarities with the current ECB situation? What was the performance of euro-dollar after the July 2008 and 2011 events? July tends to create a need for policy changes at the ECB ECB’s President Lagarde [..]

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