Weekly Importer / Exporter Analysis 9-15-14

Importers sweep the week, in a big way.  There are a number of factors at play, but many point to a flight to dollars.  When geopolitics heat up and there are financial crises potentially on the horizon, people start to hoard dollars, making them more valuable overall.  This is a big week with the Federal Reserve Open Market Committee meeting on Wednesday and Scotland’s independence referendum on Thursday.  Sprinkle in some action in Ukraine and Syria and you may have a recipe for volatility.  Is it time to buy Russian Rubles?  They reached a record low last week on account of sanctions.

Other US economic data for this week is here.

Who won the battle last week, between the USD and five currencies?  The perspective is strictly from America, so if against the Aussie Dollar, United States importers won, that also means Australian exporters won as well.  I am changing the sign convention: negative percentage changes mean that exporters have the advantage while positive numbers show the advantage for importers.

Currency Week Ending 9-12-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 0 2.6% -2.33%
Canadian Dollar (CAD) Importers Win! 0 1.3% 3.56%
Euro (EUR) Importers Win! 3 0.1% 6.12%
British Pound Sterling (GBP) Importers Win! 9 0.2% 1.98%
Japanese Yen (JPY) Importers Win! 4 1.7% 1.69%

Thanks,

Damon

Weekly Importer / Exporter Analysis 9-8-14

Big moves in the last two weeks.  Last week had a lot of economic news, beginning with worse economic data coming from Europe.  Various measures suggest that the entire zone is moving toward recession and deflation.  Several member states are already in one or both categories.  Mario Draghi took one last rate cut at the European Central Bank with everyone believing that quantitative easing of some sort will be the next step.  By reducing the interest paid by the ECB to depositors (which moved into negative territory for some deposits earlier in the summer) the value of the Euro relative to the dollar had to decline.  This is due to the fact that if you had dollars or Euros and had to put them into a bank account, the dollars will accrue more interest.  Thus, you would convert your idle Euros to dollars to take advantage of the better interest rate.  This is great news if you are an importer from Europe.  If you had your eye on German suppliers, this may be the time to approach them.  As an exporter, this means your inventory is now more expensive to those in Europe, and this may affect your sales if you cannot change your price.

The US Nonfarms Payroll number was lower than expected at 142,000 new jobs created last month.  While still positive, this is a movement away from the strong average over the course of the year.  It can be an outlier, but look to the October number to start moving markets, especially if it is under the expected range.  This number is important because it shows the “health” of the US economy.  If the private sector is adding jobs, than the economy must be improving.  However, the replacement rate is around 180,000.  This means the economy is 38,000 jobs short just to take care of new workers coming into the market.  Gird your loins for October!

Speaking of October, the ECB will release its banking sector stress test results.  If the tests are a joke, expect markets to lose faith in European banks.  If the tests are good, and the results are bad, expect an exodus from the sector, and probably the Euro.  Nobody is really predicting a good outcome here.

In a shocker, a poll on Scottish independence revealed, for the first time, that people are more likely to vote for independence than to stay within the UK.  The results were in the margin of error, but the psychological damage is done.  Nobody really thought that independence was going to happen, but markets are reacting to the news by selling pounds, driving the price down.  The UK government promised more concessions to the Scots today, but it appears it may be too little too late.  September 18th is the actual vote.  (A lot of “Braveheart” programming likely in the next ten days.)

The “Weekly Change” covers two weeks.

Other US economic data for this week is here.

Who won the battle last week, between the USD and five currencies?  The perspective is strictly from America, so if against the Aussie Dollar, United States importers won, that also means Australian exporters won as well.  I am changing the sign convention: negative percentage changes mean that exporters have the advantage while positive numbers show the advantage for importers.

Currency Week Ending 9-5-14 Weeks in a Row Weekly Change (for two weeks) YTD Change
Australian Dollar (AUD) Exporters Win! 0 -0.3% -4.99%
Canadian Dollar (CAD) Exporters Win! 0 -0.6% 2.2%
Euro (EUR) Importers Win! 2 2.5% 6.06%
British Pound Sterling (GBP) Importers Win! 8 1.7% 1.73%
Japanese Yen (JPY) Importers Win! 3 1.3% -0.14%

Thanks,

Damon

Weekly Importer / Exporter Analysis 8-25-14

Importers sweep the week.  Given the geopolitical problems in Iraq, Syria, Gaza, Israel, Ukraine, and Russia, investors are moving into dollars as a safe haven.  This increases the global value of a dollar, giving an advantage to importers.  With economic numbers from Europe looking terrible, pressure is on the European Central Bank to act.  Markets are expecting a run of quantitative easing.  I think it would be better to skip banks all together, print money, and give it to people to boost demand and move away from deflation.

Other US economic data for this week is here.

Who won the battle last week, between the USD and five currencies?  The perspective is strictly from America, so if against the Aussie Dollar, United States importers won, that also means Australian exporters won as well.  I am changing the sign convention: negative percentage changes mean that exporters have the advantage while positive numbers show the advantage for importers.

Currency Week Ending 8-22-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 0 0.1% -4.62%
Canadian Dollar (CAD) Importers Win! 0 0.3% 2.76%
Euro (EUR) Importers Win! 0 0.6% 3.54%
British Pound Sterling (GBP) Importers Win! 6 0.6% 0.01%
Japanese Yen (JPY) Importers Win! 1 1.3% -1.40%

Thanks,

Damon

Weekly Importer / Exporter Analysis 8-18-14

Exporters mostly win.  Good news in Iraq and Ukraine may temper markets, but there are still a number of geopolitical risks in the mix.  Watch for EU action on deflation.

Other US economic data for this week is here.

Who won the battle last week, between the USD and five currencies?  The perspective is strictly from America, so if against the Aussie Dollar, United States importers won, that also means Australian exporters won as well.  I am changing the sign convention: negative percentage changes mean that exporters have the advantage while positive numbers show the advantage for importers.

Currency Week Ending 8-15-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Exporters Win! 0 -0.5% -4.77%
Canadian Dollar (CAD) Exporters Win! 0 -0.2% 2.47%
Euro (EUR) Exporters Win! 0 -0.1% 2.90%
British Pound Sterling (GBP) Importers Win! 5 0.9% -0.64%
Japanese Yen (JPY) Importers Win! 0 0.3% -2.69%

Thanks,

Damon

Weekly Importer / Exporter Analysis 8-11-14

Importers gaining in most currencies as markets move to dollars and gold.  Fear of Russian self-imposed sanctions doing damage to the European recovery combined with Islamic State (IS) gains and continued fighting in Syria and Gaza lead to risk aversion.

Other US economic data for this week is here.

Who won the battle last week, between the USD and five currencies?  The perspective is strictly from America, so if against the Aussie Dollar, United States importers won, that also means Australian exporters won as well.  I am changing the sign convention: negative percentage changes mean that exporters have the advantage while positive numbers show the advantage for importers.

Currency Week Ending 8-8-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 1 0.4% -4.21%
Canadian Dollar (CAD) Importers Win! 1 0.2% 2.63%
Euro (EUR) Importers Win! 5 0.2% 2.97%
British Pound Sterling (GBP) Importers Win! 4 0.3% -1.50%
Japanese Yen (JPY) Exporters Win! 0 -0.6% -3.03%

Thanks,

Damon

Weekly Importer / Exporter Analysis 8-4-14

Importers sweep the week, which is not surprising given last week’s data and geopolitical action.  During times of stress, investors move to “safe havens” such as dollars and gold, which increases the value of dollars and benefits importers.  For this week, Gaza appears to be winding down, though that situation is extremely volatile.  The Ukrainian government appears to be making gains against separatists, but Russia is running “military exercises” on the border, potentially preparing for invasion.

Other US economic data for this week is here.

Who won the battle last week, between the USD and five currencies?  The perspective is strictly from America, so if against the Aussie Dollar, United States importers won, that also means Australian exporters won as well.  I am changing the sign convention: negative percentage changes mean that exporters have the advantage while positive numbers show the advantage for importers.

Currency Week Ending 8-1-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 0 1.3% -4.61%
Canadian Dollar (CAD) Importers Win! 0 1.5% 2.39%
Euro (EUR) Importers Win! 4 0.5% 2.74%
British Pound Sterling (GBP) Importers Win! 3 0.6% -1.88%
Japanese Yen (JPY) Importers Win! 1 0.9% -2.42%

Thanks,

Damon

Weekly Importer / Exporter Analysis 7-28-14

US GDP on Wednesday and Nonfarm payrolls on Friday.  Gaza ceasefire has failed, maintaining regional uncertainty.  Ukrainian officials claim that they are making gains in the East.

Other US economic data for this week is here.

Who won the battle last week, between the USD and five currencies?  The perspective is strictly from America, so if against the Aussie Dollar, United States importers won, that also means Australian exporters won as well.  I am changing the sign convention: negative percentage changes mean that exporters have the advantage while positive numbers show the advantage for importers.

Currency Week Ending 7-25-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Exporters Win! 0 -0.7% -5.90%
Canadian Dollar (CAD) Exporters Win! 0 -0.2% 0.93%
Euro (EUR) Importers Win! 3 0.4% 2.19%
British Pound Sterling (GBP) Importers Win! 2 0.6% -2.48%
Japanese Yen (JPY) Importers Win! 0 0.5% -3.38%

Thanks,

Damon