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Name The Worst-Performing Currency Of The Year

Tyler Durden's picture




 

On the heels of Abe's final decision to appoint a somewhat middle-of-the-road 'dove' as BoJ Governor, we thought it appropriate to look at the year's FX performance to see who is 'winning' the currency wars so far this year. The answer may surprise you (or not if you had read this or this).

GBP (blue) is the 'worst'-performing currency versus the USD this year - having overtaken the JPY in the last two days... higher on the chart below is USD strength

 

Interestingly, given US equity performance YTD, the USD is 2.25% stronger on the year against a broad basket of currencies.

 

The USD is 'seasonally' strong in Q1 on average over the past 30 years but this rise is quite remarkable relative to that average and we can only imagine what impact this will have on corporate earnings for Q1 as the S&P 500's 46% overseas revenues gets notched down on the income statement.

Charts: Bloomberg

 

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Thu, 02/28/2013 - 12:35 | 3286076 prains
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All of them

Thu, 02/28/2013 - 12:37 | 3286077 TruthInSunshine
TruthInSunshine's picture

The elite who meet to greet & beat at the G7 have given permission to Japan to "debase their way out of their debt" given that they are the the most indebted, crippled advanced economy of any particular one (the EU is obviously a spectrum of economies), and if not given the chance to devalue the yen into nothingness, they would soon be the circuit breaker that trips and blows up the global economy.

Just a thought.

Thu, 02/28/2013 - 12:46 | 3286144 EscapeKey
EscapeKey's picture

Only if you consider public debts.

If taking into account all debts - including household, business and financial - the UK reigns supreme!

Great Britain indeed!

Thu, 02/28/2013 - 13:04 | 3286230 Ghordius
Ghordius's picture

yes, but the Bank of England can devalue at will - they tell me this is very important, and the new incoming governor has already stated he wants to push the pedal to the metal

Martin Wolf was writing lately in the FT that "tens of millions of people are suffering unnecessary hardship. It is tragic" and calling for an end to austerity

he ends the article with "In the long run, the fiscal deficit must close. In the short run, the UK has a chance to push growth. It should take it. So should the US"

can't argue with Martin Wolf, can I?

Thu, 02/28/2013 - 13:11 | 3286279 Sandmann
Sandmann's picture

Ghordius you know that no serious country can gain competitive advantage with Devaluation in the absence of an Export Sector operating in sectors with high growth of Demand and high Export Elasticity, and that Britain is not the prime example. Mark Carney comes from a country with overvalued Dollar predicated on raw materials and a bizarre housing boom. He is going to find the UK a nightmare and i doubt he will have an enjoyable time. Britain has devalued repeatedly since 1931 and has an ever-decreasing share of World Trade. It is an act od desperation rather than a credible policy option.

They did it in 2008 simply to compensate for the Blowout on QE and Bank Bailouts but you cannot win with such a policy when China is your trade partner

Thu, 02/28/2013 - 13:15 | 3286305 DaveyJones
DaveyJones's picture

you mean we live in physical world? 

Thu, 02/28/2013 - 13:34 | 3286371 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

But of course, Tbills are the safest asset.  Or so I hear.

Thu, 02/28/2013 - 14:40 | 3286626 TruthInSunshine
TruthInSunshine's picture

Many good points being made here regardless as to whose thesis is closest to reality (I mean that in a genuine, non-kiss ass way).

And regardless as to whose thesis is closest to reality, the cries from some who most likely didn't get the memo grow more frequent & louder:

02-28 13:03: Chrysler CEO says US automakers disadvantaged by weaker JPY

p.s. - ES, you make a very good point about the UK's debt load & its composition, but relative devaluation of the fiat currencies utilized by nations that are major net exporters & manufacturers of high value-added goods benefits the Japans much more so than the UKs of this world, in terms of allowing the current post-Plaza Accord monetary system to live another day, IMO.  To add a little more substance to this line of thinking, Japan is essentially a natural resource black hole, while the UK at least has oil off its shores and also is the domicile of some of the largest oil companies on the planet.

Thu, 02/28/2013 - 15:08 | 3286860 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

 

So if I read this right, hyperinflation in Japan comes much faster than the Queen's hyperinflation, right?  

In Japan, gov't will be printing the quadrillion **while the population is dumping their savings**.  In Queeny's fairy kingdom, the population will be happy to see debtloads getting easier.  

Does that make sense?

Thu, 02/28/2013 - 13:23 | 3286342 Ghordius
Ghordius's picture

Sandmann, how dare you to flaunt dirty facts against the words of brilliant people like Wolf and Carney

Thu, 02/28/2013 - 13:47 | 3286419 Al Huxley
Al Huxley's picture

It's been made pretty clear, particularly since December, that the Western world can monetize without consequence.  So really, they should make things better for all of us (since they've expressed their really touching concern for the masses) and stop collecting taxes and just monetize the entire fucking budget, all the time.  And then all they have to do is print up a few extra gold contracts to keep the price of gold down, which will thus ensure there's no inflationary impact.  Big winfall for the prols that they're oh-so concerned about, no consequence, free fucking ponies all around.

Thu, 02/28/2013 - 14:24 | 3286618 OutLookingIn
OutLookingIn's picture

LMAO!

A discussion on the best looking horse at the glue factory!

Thu, 02/28/2013 - 16:58 | 3287521 Totentänzerlied
Totentänzerlied's picture

Gas prices ...

Thu, 02/28/2013 - 15:06 | 3286852 EscapeKey
EscapeKey's picture

carney is unquestionably brilliant - he was shoring russian bonds while advising them at the same time.

good thing those chinese walls are up, and all, or you might have considered it to be a huge conflict of interest.

Thu, 02/28/2013 - 12:58 | 3286196 Cdad
Cdad's picture

I made this very point about 4 weeks ago...that the JPY trade may well become a trade that gets out of control.  And considering the absolute lack of understanding of this situation as measured by comments coming from the leadership in Japan, the Oh Shit moment seems close at hand.  And in the HFT world in which we live, we all know how quickly that can happen.  Hours?  Minutes even.

Of course, here in the US, that potential loss of control will come while we sleep, when only the Pacific Ocean is buying and selling the JPY, E minis, etc.

Personally, I believe this is EXACTLY how the great unwind will come.  And so despite how Bernanke, the current reigning super heavy weight debasement king, should be setting us up for a dollar drop, I rather think a dollar surge is at hand.  And we all know how much the S&P loves a surging dollar.  February price action in the Dixie would seem to confirm the thesis.  Gold prices seem to be hinting at this, as well.

Thu, 02/28/2013 - 13:48 | 3286423 Al Huxley
Al Huxley's picture

No,no, you don't understand - the sun revolves around the US empire.  The Asians would NEVEReven think to instigate a real crisis off NY market hours.

Thu, 02/28/2013 - 16:24 | 3287327 Ghordius
Ghordius's picture

it would make Uncle Sam quite unhappy, yes - meanwhile what happens in NY is NY's fault

Thu, 02/28/2013 - 12:48 | 3286154 rogeliokh
rogeliokh's picture

It Could be GOLD as well, I know it's manupulated but it's been dropping 6 month

in the row now, non stop. And keep falling, like a penny stock.

Thu, 02/28/2013 - 12:56 | 3286193 Xibalba
Xibalba's picture

Silver 

Thu, 02/28/2013 - 13:07 | 3286249 Theosebes Goodfellow
Theosebes Goodfellow's picture

Have you seen silver in the last 3 hours, (6am-9am PST)? Monkey-hammered for $.50 USD, (right on schedule)!

Thu, 02/28/2013 - 13:14 | 3286295 Xibalba
Xibalba's picture

Everyday.  It's USA 'policy'.

Thu, 02/28/2013 - 13:15 | 3286299 Scro
Scro's picture

All I do is buy silver, buy silver, buy silver, oh hey, another dip I think I'll buy some silver.

Thu, 02/28/2013 - 13:34 | 3286374 Big Slick
Big Slick's picture

Don't forget to grab a bit of Pb, Scro

Thu, 02/28/2013 - 12:54 | 3286184 Never_Put_Down
Never_Put_Down's picture

...we will only find out the currencies real value after the currency crisis hits, consider the Central Banksters are all printing at the same rate and consider the chronically manipulated precious metals market and consider the chronic manipulation of oil reserves, the real value of the strongest currency could go to zero after SHTF, ushering in a new Chinese gold backed currency and the end of the petro-dollar

Thu, 02/28/2013 - 12:36 | 3286085 Dr Paul Krugman
Dr Paul Krugman's picture

Good thing all you doomers decided to fill your pockets full of shiny rocks! Winners!

Thu, 02/28/2013 - 12:38 | 3286097 Edward Fiatski
Edward Fiatski's picture

As long as the Annunaki trade me their hot alien womenz for it, I'm game.

Thu, 02/28/2013 - 12:39 | 3286099 achmachat
achmachat's picture

ah yes... good thing that the USD didn't go down at all, compared to anything real, during that time.

Thu, 02/28/2013 - 12:41 | 3286106 Shell Game
Shell Game's picture

Good thing glue sniffers like Krudman have filled their pockets with IOUs, hope and unicorns!   FTMFW!

Thu, 02/28/2013 - 12:55 | 3286188 Esso
Esso's picture

Say, big fellah, is that a unicorn in your pocket or are you just glad to see me?

Thu, 02/28/2013 - 13:21 | 3286331 Shell Game
Shell Game's picture

It's a unicorn - with a very big horn...

Thu, 02/28/2013 - 12:43 | 3286127 Ivanovich
Ivanovich's picture

That's the funny thing about Keynesian Economics.  You have to wait a while before you see the true effects of it.  I'm patient.  My shiny rocks don't degrade.

Thu, 02/28/2013 - 12:44 | 3286129 EscapeKey
EscapeKey's picture

I would like to believe that the real Krugman would be above condensed one-liner petty arguments, but in reality, he probably isn't.

Thu, 02/28/2013 - 12:54 | 3286183 Dr Paul Krugman
Dr Paul Krugman's picture

The fact is gold bugs are the most stubborn, mean, and unreasonable folks around. I get quite the load of hate mail and most of it comes from doomers. I understand one point of theirs, being, we are in a depression, yet how will clutching rocks help us with growing the economy when growth is based on revenue?

Thu, 02/28/2013 - 13:02 | 3286214 EscapeKey
EscapeKey's picture

Oh, I don't know - I don't think anti-goldbugs (or anti-anything) are much better when it really comes down to it. Much debate essentially sadly ends in name-calling (I've been guilty of this as well), probably because it's easier typing in a one-liner than a reasoned argument.

But I guess it ultimately comes down to whether you believe growth is possible at this point. Debts are pretty much at all-time highs, economies are reeling at best, central banks print at an ever faster pace, and governments make rhetoric about austerity, although what we actually see is more like cutting the growth of government spending, rather than the spending itself.

Regardless, personally I don't think gold is the only asset to own if a worst-case scenario were to unfold, but historically, it's been an extremely safe asset for wealth conservation. And that's what I view it as - an insurance policy.

Thu, 02/28/2013 - 13:01 | 3286216 dick cheneys ghost
dick cheneys ghost's picture

growth is 'jewish' for debt

Thu, 02/28/2013 - 13:16 | 3286291 Xibalba
Xibalba's picture

People trying to protect themselves from reckless policies are not 'doomers'.  They have seen what happens all through history when Governments turn on their people.  Rome, Wiemar, Zimbabwe, Japan, etc...

Thu, 02/28/2013 - 13:18 | 3286313 DaveyJones
DaveyJones's picture

"clutching rocks"

like in afghanistan?

I thought we were picking flowers?

Thu, 02/28/2013 - 13:22 | 3286337 yogibear
yogibear's picture

Since we are in a depression and saturated with debt. We also have global labor arbitraging and an excess of cheap labor what's your Solution?

Print and the money goes somewhere. It lifts asset prices (as we currently have, oil and food). To pay for the excess of debt (pension obligations and public salaries)  municipalities increase tax and fees. We see this in CA, NY and others.

Thu, 02/28/2013 - 13:46 | 3286418 Peter Pan
Peter Pan's picture

It is you Dr Krugman who is clutching at counterfeit money and a counterfeit notion that is destroying the world. Give gold its rightful and historical place and the world will once again trade and thrive as it did for thousands of years.

Thu, 02/28/2013 - 14:07 | 3286528 erushbass
erushbass's picture

Growth is based on production, Mr Krugman.

Its better to clutch a shiny rock than a piece of paper, silly.

 

Thu, 02/28/2013 - 12:46 | 3286149 fuu
fuu's picture

Drunk Ass Party is back!

Thu, 02/28/2013 - 15:35 | 3287060 bnbdnb
bnbdnb's picture

I'll listen to you when you shit gold.

Thu, 02/28/2013 - 12:38 | 3286096 McMolotov
McMolotov's picture

Fig Newtons

Thu, 02/28/2013 - 12:44 | 3286130 Peter Pan
Peter Pan's picture

Currencies are like shit. Some turds float and some sink to the bottom. But in the end they are all flushed. And so it will be with all fiat currencies by the time all is said and done.

Thu, 02/28/2013 - 13:19 | 3286321 DaveyJones
DaveyJones's picture

don't insult shit

it can fertilize plants

Thu, 02/28/2013 - 14:03 | 3286512 Peter Pan
Peter Pan's picture

I agree but don't try it with human shit. It doesn't work so well. Our shit is full of shit.

Thu, 02/28/2013 - 12:46 | 3286139 francis_sawyer
francis_sawyer's picture

Must be a lot of bitcoin kiosks in the UK...

Thu, 02/28/2013 - 12:48 | 3286155 Peter Pan
Peter Pan's picture

Nothing will save the day unless human stupidity is curbed and hopefully reversed.

Thu, 02/28/2013 - 12:51 | 3286163 francis_sawyer
francis_sawyer's picture

It's time to embrace the horror that that will never happen... I'll sell you all the naked CALLS you want on that hope...

Thu, 02/28/2013 - 12:53 | 3286170 Peter Pan
Peter Pan's picture

And which of the potential horrors are you referring to? By the way stop editing while I am replying. LOL.

Thu, 02/28/2013 - 13:33 | 3286289 francis_sawyer
francis_sawyer's picture

The horror that 'human stupidity' will never be reversed... But I suppose you could toss in BITCOINS while you're at it...

~~~

On a more serious note [to all bitcoin freaks]... I'm not against the PHILOSOPHY of bitcoins... I just can't see it becoming fully OPERATIONAL on a mass scale [too many obstacles & limitations]...

While not a perfect analogy, I'll offer the following:

- I believe that BITCOINERS see the evolution as being somewhat to evolution of PC's into mainstream usage ~ or the internet & smartphones

- Instead, I see it more like DIRECT CURRENT [whereby ~ ALTERNATING CURRENT was the easier way to go until the REAL Tesla Coil gets uncrated from the box in the warehouse where they put the Ark of the Covenant at the end of the Indiana Jones movie]

~~~

IOW ~ Thomas Edison would have probably loved bitcoins... Nikola Tesla ~ prolly not...

Thu, 02/28/2013 - 12:56 | 3286192 Yen Cross
Yen Cross's picture

    From a purely technical perspective, the $ is due for some sort of retrace starting in the next few days. Unfortunately we can't use technicals because of the sequester tomorow.

    Early next week will be very revealing. I just closed my last open trade. I'll just sit back and watch the [Kabuki Theater] for a few days , unless an obvious trade reveals itself.

Thu, 02/28/2013 - 12:58 | 3286202 orangegeek
orangegeek's picture

The Euro has been in a slide from 1.37.  Sits at around 1.30.

 

http://bullandbearmash.com/chart/euro-daily-declining-sharply-channel-su...

 

Headed for below 1.20.

Thu, 02/28/2013 - 12:59 | 3286208 Dr. Engali
Dr. Engali's picture

Get to work Mr. Chairman.

Thu, 02/28/2013 - 13:06 | 3286242 syntaxterror
syntaxterror's picture

Yes, get to work Mr. Chairman!

Forward with the strong dollar policy!

Thu, 02/28/2013 - 13:07 | 3286247 Sandmann
Sandmann's picture

For a fully financialised economy like the UK Currency Depreciation makes no sense. A financialised economy needs a Hard Currency as a store of value. That they drive the Exchange Rate down and have no real industrial base or Export Elasticity but high Import Inelasticity shows just how bankrupt policy-making in the UK really is. They have ZERO ability to influence the Terms of Trade. All they do is erode real incomes and impose an intense squeeze on households and businesses by inflating Energy Prices, driving up Food Prices and running a hyper-loose high-powered monetary policy restricted to Banks and having a credit squeeze on households and SMEs.

It is the most bizarre Economics I have ever seen and suggests sclerotic minds or simply Men who haven't a clue

Thu, 02/28/2013 - 13:11 | 3286280 Yen Cross
Yen Cross's picture

  You are absolutely right Sandmann. +1

Thu, 02/28/2013 - 14:06 | 3286533 Peter Pan
Peter Pan's picture

Sandman is right, but the UK economy no longer exists for the benefit of its people. It is there to serve the interests of the City of London and the vested interests that operate there.

Thu, 02/28/2013 - 13:17 | 3286310 DogSlime
DogSlime's picture

They have a clue.  They know exactly what they're doing - the masters they serve are not the ordinary UK public that elected them.

They'll see us all starve, freeze and die from poverty before they will do anything that would endanger their friends in the financial services, energy corporations etc.

Thu, 02/28/2013 - 14:54 | 3286763 css1971
css1971's picture

No, you're giving The City too much credit. Our biggest exports are weapons and drugs.

(There's a reason we're portrayed as the bad guys in movies always.)

Thu, 02/28/2013 - 13:10 | 3286272 medium giraffe
medium giraffe's picture

Paper.

 

Thu, 02/28/2013 - 13:12 | 3286284 NoWayJose
NoWayJose's picture

They need an excuse for the Q1 misses. Then they can project the dollar getting weaker, and future earnings will hockey stick up - just one more quarter further in the future.

Thu, 02/28/2013 - 14:38 | 3286682 No Euros please...
No Euros please we're British's picture

Doesn't surprise me that GBP is the big winner here.

When we talk about austerity in the UK, I wonder WTF they are talking about. When they talk about cutting back on public sector spending, I look at the figures and guess they must be smoking too many exotic cigarettes in "the house". When they talk of cutting social security benefits, I know that's just newspaper talk.

When I look how many EXTRA euros my holiday this year is going to cost since I booked it I KNOW things are not what they seem,

When I hear, as expected in some quarters, an ex-Goldmanite is about to run the UK economy, I KNOW we are in the S H 1 T.

When the Labour party get re-elected, the circle of doom is complete and we will have to devalue the £ by 50% to get out of this mess.

The only fly in the ointment is that the US will collapse first and spoil the party.

 

Thu, 02/28/2013 - 14:52 | 3286749 css1971
css1971's picture

You know how gold is down?

It's not.

Not for those of us in GBP land anyway. I've given up on the pound and am using gold as my base currency now.

Thu, 02/28/2013 - 16:47 | 3287464 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

Abe San is a mere amateur in the currency destruction game,a little begginers luck has already put him in second place behind the real experts in devaluation - HM Goverment and the Bank of England.

He has been reported by the worlds media as wanting to totally destroy the Yen,and in the process removing the autonomy of the Bank of Japan governor and appointing a replacement who has been appointed on one condition and that is to destroy the Yen,and in just three short months the Yen is knocked into second place as the worlds worst currency by sterling.This is without any overt policy by the Bank of England or official devaluation being announced.Like a subtle raising of an eyebrow by James Bond, a hint or a few well chosen words here and there by a Bank of England official or Treasury Minister can send the pound down with more force than the entire Japanese government can achieve by screaming from the radioactive rooftops of Tokyo.Long term followers of sterling know that the solution to every crisis encountered by the UK government in the last 100 years is met by one response,and one response only - devaluation,hence the attention paid to signals from government officials.

Imagine what the UK government can achieve if it REALLY wants to devalue sterling!(Enter Mark Carney stage left)and here we have the next stage of wealth destruction UK stylee.Carney will devalue sterling by at least 50% and that is just for starters,if that doesn't work there will be further QE and devaluations and regular press briefings to ensure the whole world understands that "growth" i.e. the reumption of lending to fuel the housing market will be pursued at any cost to savers and holders of sterling. 

Thu, 02/28/2013 - 18:15 | 3287853 FunkyOldGeezer
FunkyOldGeezer's picture

Actually, the British Pound has been the worst performer since late October 2008.

Nothing new to see here.

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