It becomes a tradition to post a performance review of the top currencies vs. gold at the beginning of the new year.
Fiat money is represented by 7 currencies: The US dollar (USD) and 6 components of the US dollar index (DXY) placed by weight: euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and the Swiss franc (CHF).
Chart 1. Year-To-Date Dynamics Of Top 7 Currencies Versus Gold: No Comment
Diagram by Aibek Burabayev; Source: tradingview.com
The Euronews agency has a special rubric called “No comment” where they show video news without commentary as the picture speaks for itself when something dramatic, awful or really amazing is shown. I think the above diagram also speaks for itself and it shows the drama where the gold just smashed all of the fiat currencies as none of them could escape. None! Continue reading "Top Fiat Money Vs. Gold: What Shines Brighter in 2016?"→
Geopolitical issues have dominated the markets this year, and polls have been useless in lending any kind of certainty to asset prices.
OPEC has successfully managed expectations for a production freeze, even if an eventual deal is still unlikely, which has driven oil prices to nearly double since their February lows. Few would have predicted in January the momentum of the Trump campaign and the potential uncertainty on global trade.
Friday, June 24th will be remembered as a Black Day for the British Pound. On that day, investors, shocked by the “leave” vote for Brexit, pushed the Pound off a cliff, toward its worst daily loss since 1985. And yet, despite the Pound being at the eye of the storm after the Brexit vote, it’s not the Pound’s future that investors should fear.
Brexit Impact On The Pound Sterling
The impact Brexit will have on the Pound should be divided into two ranges—short to mid-term and long-term.
In the short to mid-term, it’s undeniable that the Pound will face significant and broad pressures—monetarily, fiscally and economically. The Bank of England will likely need to deploy extra liquidity measures to assure stability in the financial system which, effectively, is monetary easing. From a political standpoint, uncertainty has increased dramatically. On Friday, the UK Prime Minister, David Cameron, resigned, and his “heir apparent” is still unclear. But even more, troubling is the future of Scotland within the United Kingdom. The Scots will be compelled to cast another vote, this time on their willingness to leave the United Kingdom and stay with the European Union. Continue reading "Brexit: The Pound Will Survive, The Euro Will Not"→
Unless you've been incommunicado this past week, you've surely noticed that the FX arena has been dominated by one trade. That, of course, is short Sterling, because Britain appears on the verge of leaving the European Union (EU).
The black swan event that brought about this situation was the surprise announcement by Boris Johnson, the incumbent Mayor of London. Johnson, a rising star of the Tories, is campaigning for Britain to leave the EU. That, of course, was a bit of a game changer. Investors got spooked by the thought of the financial Armageddon that could be visited upon Britain if a Brexit (British Exit) does occur.
A year ago I wrote a post to compare the top currencies dynamics against Gold inside of the year. Today I want to repeat the experiment to see which one could beat the safe haven and which one couldn't. This time, you will see a modified version of the chart where the inverse metal crosses show not Gold's (last year version), but the currencies' dynamics for easier eye perception.