Weekly Importer / Exporter Analysis 10-27-14

Importers continue to benefit from the news.  While the European Central Bank (ECB) stress test results were underwhelming, it appears they have struck the right balance.  Markets are moving, but there were no extreme events.  Look to nonfarm payrolls next week to see if the US is continuing its reduction in unemployment streak, which would continue to help importers as the holiday season approaches.

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 10-24-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 1 0.5% 1.83%
Canadian Dollar (CAD) Exporters Win! 0 -0.3% 5.15%
Euro (EUR) Importers Win! 0 1.4% 8.37%
British Pound Sterling (GBP) Exporters Win! 0 -0.1% 2.83%
Japanese Yen (JPY) Importers Win! 0 2.0% 3.08%

Thanks,

Damon

Weekly Importer / Exporter Analysis 10-20-14

The dollar continues to increase in value relative to other currencies.  This is making imported goods less expensive.  This is one factor in the drop in oil prices, the other being decreased demand.  Are you feeling it at the pump?  This could be considered a low-cost stimulus package as consumers will have more cash in their pockets going into the holiday season.

The European Central Bank (ECB) is going to release the bank stress test results on October 26th.  Read more here.

Ukraine has negotiated for natural gas over the winter.  This should ease tensions, but I would not be surprised by a shock of some sort.  Ukrainian officials have not disclosed how they will pay for their previous bills, though the amount has been agreed to.

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.

(Weekly Change Covers Two Weeks)

Currency Week Ending 10-17-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 0 0.2% 1.35%
Canadian Dollar (CAD) Importers Win! 3 0.9% 5.48%
Euro (EUR) Exporters Win! 2 -1.0% 6.99%
British Pound Sterling (GBP) Importers Win! 3 0.4% 2.93%
Japanese Yen (JPY) Exporters Win! 3 -2.0% 1.03%

Thanks,

Damon

Weekly Importer / Exporter Analysis 10-6-14

It is clear to markets that the US economy is growing while the EU and Japan are sputtering.  China is also looking weaker as commodities scandals and shadow banking snafus are discovered.  This is good for US importers since it drives the price of foreign goods down.  For Europe and Japan, is the dollar’s rise in value going to bring the inflation both countries are looking for?  Oil and other commodities are priced in dollars, so as the exchange rate moves against their own currencies, fuel and materials become more expensive.

European Central Bank stress tests are due at the end of October, and any natural gas supply shocks to the EU should rear their ugly head soon.

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 10-3-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 3 0.1% 1.09%
Canadian Dollar (CAD) Importers Win! 1 0.4% 4.59%
Euro (EUR) Importers Win! 5 0.6% 7.96%
British Pound Sterling (GBP) Importers Win! 1 1.0% 2.54%
Japanese Yen (JPY) Exporters Win! 1 -0.0% 3.04%

Thanks,

Damon

Weekly Importer / Exporter Analysis 9-29-14

Nonfarm payrolls are up on Friday.  The dollar is growing more valuable as the US economy looks to be the only one growing.  Central banks in Europe and Japan are looking to start or increase quantitative easing.  Importers nearly sweep the week.

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 9-26-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 2 2.0% 0.98%
Canadian Dollar (CAD) Importers Win! 0 1.4% 4.14%
Euro (EUR) Importers Win! 4 1.2% 7.34%
British Pound Sterling (GBP) Importers Win! 0 0.7% 1.51%
Japanese Yen (JPY) Exporters Win! 0 -0.2% 3.12%

Thanks,

Damon

Weekly Importer / Exporter Analysis 9-22-14

We survived!  Scotland remains a part of the UK, the Federal Reserve had no surprises, and nothing really new out of the middle East or Ukraine.  On account of the Scottish vote to stay, expect a nice rally in GBP to ensue.

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 9-19-14 Weeks in a Row Weekly Change YTD Change
Australian Dollar (AUD) Importers Win! 1 1.3% -1.02%
Canadian Dollar (CAD) Exporters Win! 0 -0.7% 2.72%
Euro (EUR) Importers Win! 4 0.1% 6.15%
British Pound Sterling (GBP) Exporters Win! 0 -1.1% 0.87%
Japanese Yen (JPY) Importers Win! 5 1.6% 3.30%

Thanks,

Damon

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