Archive - Jan 12, 2013 - Blog entry

Or did I mean Commem-Mooning a moron idea?

America Sets Its Sights On Controlling African Resources … And Reducing Chinese Influence

There are very few free lunches in the world, there will be some costs or unintended consequences of this newfound commitment towards a weaker Yen.

Even if you’re white, insured, educated, or in upper-income groups and live a healthy lifestyle, you’re still getting the short end of the stick

If you try to sit on a four-legged stool that has one busted leg, you fall on your ass, look surprised or stupid, and maybe get hurt.

There have been some large moves in the foreign exchange market in recent days.  The euro posted its largest rally in four months last week.  The yen has fallen to its lowest level against the dollar since June 2010 and extended the declining streak to nine consecutive weeks, something not seen since 1989.  The Canadian and Australian dollar rose to multi-moth highs, as did the Mexican peso.  

In last week's technical note, we suggested the key question whether the sharp drop in the major foreign currencies following the avoidance of the full fiscal cliff in the US was trend reversal or overdue correction.  We favored the latter and looked for the underlying trends to continue.   They did.  

Now market participants face a different question.  Given the out-sized moves, have the trends become stretched?  The answer, we propose, is more nuanced than last week.  There is not one answer for all the major currencies we review here.