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The End of 2008!

* The dollar rebounds... * Home prices collapse! * Consumer Confidence finally rings true... * Chuck Speak to end the year! ** The End of 2008! Good day... And a Wonderful Wednesday to you! An end of the year Wednesday to boot! And end of a completely awful year financially and economically. Personally, it was great! I got good news from scans about the cancer I'm fighting, had a setback with the eye, but I'll get through that too, and if not, well, it will be just like my kidney... I lost one, but still have a good one, and if I lose the vision in one eye, I'll still have a good one! The currencies look like they'll end the year on a sour note, except Japanese yen, of course. The dollar rallied back overnight after spending most of the day yesterday range bound in euros 1.41-1.42... This morning, as I turn on the screens, and hear one of my all time faves on the radio, Leon Russell, "we're alone now and I'm singing this song to you" The euro has fallen to 1.3950......

Published Wed, Dec 12 2008 10:30 AM by Chuck Butler

Filed under: Dollar, Brazilian Real, Deflation, Euro, Consumer Confidence, Home Prices, Credit Crisis

Coordinated Rate Cuts!

* Yen trades to 98! * Carry Trades unwinding hurt high yielders... * Gold rallies back to $900! * Central Bank rate cuts.... ** Coordinated Rate Cuts! Good day... And a Wonderful Wednesday to you! Well... There's a ton of stuff to talk about today, one of which is the amazing run that Japanese yen has had in the past month, but particularly the last week! No need to sneak a peak at the currency round-up, Japanese yen is trading 98.80! WOW! I could be acting like a contortionist and trying to slap myself on the back, but that would unprofessional... And besides, the rest of the currencies are taking shots to the mid-section. Anyway... Blow the horn, the Carry Trade (for yen) is dead, may it rest in peace! OK... The currencies tried like all get out yesterday to rally VS the dollar, the euro did end the day 1% higher on the day, which after the bloodshed of the past month, I'll take that any old time! I would love to go back to 2005 (not really, but for this conversation's sake I will) and pull out some old Pfennigs where I talked about all the naysayers talking about a break up of the euro... We had the NO votes from France and Denmark on accepting the European Union's (EU) Constitution, we had riots in the streets of France, we had rising interest rates in the U.S. and dozens and dozens of naysayers called out the euro and said it would collapse under the weight. I said then, and I'll say now... HOGWASH!...

Published Wed, Oct 10 2008 9:15 AM by Chuck Butler

Filed under: Dollar, Brazilian Real, Silver, Gold, Euro, Ben Bernanke, Yen, European Central Bank, Interest Rates, Carry Trade, Icelandic Krona, Financial Crisis, European Union

Does The Bail Out Constitute A CDS Event?

* A potential CDS debacle... * Currencies rally back... * Brazilian real history... * Saber rattling or geopolitical pressure? ** Does The Bail Out Constitute A CDS Event? Good day... And a Terrific Tuesday to you! Right out of the starters blocks this morning, I have to apologize for the tardiness of the Pfennig yesterday... We were experiencing some technical difficulties... In fact, if you sent me an email, I didn't get it yesterday! Things look better this morning, so, maybe we're back on track! I know it's no one's fault when this stuff happens, but it sure doesn't make me feel good about getting up at X:XX AM (I won't say because you will think I'm crazy!) to come in and write the Pfennig, only to see it not go out until late in the day! Well... The stock market here in the U.S. sure liked the news about Fannie and Freddie! I guess, they, just like the dollar bulls, didn't get the memo that this will put billions of dollars of tax burden on taxpayers, and most likely is going to cause a major disruption in the Credit Default Swaps (CDS) that are on the books... Oh, well, we have to learn to deal with mental giants all our lives, this is just another case of that!...

Published Tue, Sep 09 2008 9:05 AM by Chuck Butler

Filed under: Australia, Currencies, Brazilian Real, Gold, Euro, Carry Trade, Fannie Mae, Freddie Mac, I.O.U.S.A, Credit Default Swaps

Fannie and Freddie Back In The News...

* Strange trading days... * U.K. Retail Sales surprise.... * Norway's GDP prints strong! * A CDO lesson... ** Fannie and Freddie Back In The News... Good day... And a Tub Thumpin' Thursday to you! Don't know why... I just felt like it should be a Tub Thumpin' Thursday! I hit the wall yesterday, as I went home, and fell asleep at 3 o'clock, and didn't wake up till night time! Watched a few innings of my beloved Cardinals, wanted desperately to stay up and watch the May-Walsh beach volleyball game, but went right back to bed! So... I should be rested, eh? One would think so, but with the treatments I take, they just simply wipe me out! But... Hey! I always said that sleep was the greatest thing... I just get to enjoy more of it, right? OK... Another day of strange trading... As I signed off yesterday, the euro had given up it's previous day's gains, but found some terra firma at 1.47 and then rallied in the afternoon... If you guess right, as I have not done so this week, you can catch a great price to sell, and buy, all in the same day!...

Published Thu, Aug 08 2008 8:09 AM by Chuck Butler

Filed under: Dollar, Brazilian Real, Oil, Gold, Euro, Norway, Retail Sales, Renminbi, Fannie Mae, Freddie Mac, Collateralized Debt Obligation, I.O.U.S.A

Don't be fooled by the US GDP...

* Don't be fooled by the US GDP... * Canada, Mexico, and Brazil rally... * Aussie dollar falls... * Japanese to keep rates unchanged... ** Don't be fooled by the US GDP... Good day...And welcome to the last day of July. The dollar held its ground through most of the trading day but started to sell off as the day wound down. The currency markets seem to be stuck in a summer doldrums, with few dramatic moves. With many of the head traders enjoying a summer break (ours included), currency desks are reluctant to take on large positions. And who can blame them as the recent global economic data has left investors wondering where to turn. As I have explained to several recent callers, the global economy is experiencing a slowdown as the high commodity prices and a slumping US economy has hurt growth. The economic releases have shown an overall slowdown in growth, and rising global inflation. But the overall slowdown will have differing effects on the currencies. Asia is slowing, but a slowdown from double digit growth in China and India is much different than a slowdown in the US where growth is around 2%. Also, the Asian countries have kept interest rates low to try and keep their currencies from appreciating too quickly. These countries are therefore in a much better position to combat inflation, and can allow currency appreciation to help combat rising prices....

Published Thu, Jul 07 2008 9:08 AM by Chuck Butler

Filed under: Australia, Dollar, Brazilian Real, Euro, Yen, Canada, Japan, GDP, Mexico, Peso

Where There's Smoke...

* Fed Head Yellen comes clean! * $75 Billion in Capital needed? * Another risk even? * Higher inflation for Brazil... ** Where There's Smoke... Good day... And a Terrific Tuesday to you! I'm writing from home today as I have to deal with a catalytic converter this morning before heading into work. Writing from home is always a challenge in that I don't have my trading screens going with news scrolling continuously... But... I carry on despite my challenges! The euro recovered a bit yesterday after last Thursday's tailspin... And the recovery was smack dab in the face of some weak economic news from Germany! Here's what got the euro going and moving up once again yesterday......

Published Tue, Jul 07 2008 9:55 AM by Chuck Butler

Filed under: Dollar, Brazilian Real, China, Recession, Euro, Consumer Confidence, Bank of England, Carry Trade, Janet Yellen

Profit Taking Dominates The Day...

* Dollar faces Dynamic Duo this week... * RBA leaves rates unchanged... * Comparing decades... * Tankan is somewhat positive... ** Profit Taking Dominates The Day... Good day... And a Terrific Tuesday to you! In keeping with Pfennig tradition, I begin each July with words from one of my fave bands of the 70's, Uriah Heep... There I was on a July morning... (I could go on, but you get the point.) Well, the profit taking that I talked about yesterday morning, continued for most of the morning yesterday, causing the euro to fall from the 1.5810 level I saw when I turned on the screens, to the low 1.57 area. It had to be profit taking because why would anyone buy dollars VS euros as a long time investment, with the dynamic duo of the Jobs Jamboree and an ECB rate decision staring the dollar bulls right in the face this week......

Published Tue, Jul 07 2008 8:12 AM by Chuck Butler

Filed under: Dollar, British Pound, Brazilian Real, Oil, Euro, European Central Bank, Consumer Debt

Removing Fed Rate Hike Bets...

* The euro rallies 1-cent! * U.S Data continues to be a drag... * Canada's Carney underpins the loonie... * RBS issues a warning! **Removing Fed Rate Hike Bets... Good day... And a Happy Friday to one and all! Looks like it could be a Fantastico Friday as traders are Finally coming around to Chuck's way of thinking regarding Fed rate hikes... And as traders remove their bets for aggressive Fed rate hikes, the luster begins to fade on the dollar rally. The meetings are over for this week (they start up again next week!), YAHOO! I get to spend the day on the trading desk... I've missed everyone! OK... Front and Center this morning, we have the euro trading 1-cent higher, knock, knock knocking on Heaven's Door, I mean, the 1.56 handle. As I said in the intro, it appears that traders don't have the stomach to hold on to their bets that the Fed will aggressively raise interest rates this year. Recall, the other day, I told you that the bets were ratcheting up and had reached 75 BPS of rate hikes this year... I doubt we have any... In fact, as I told you the other day too, I believe that when the dust settles on the fact that the Fed isn't going to raise rates, things will have gotten so bad here that the Fed will be entertaining thoughts of cutting rates again!...

Published Fri, Jun 06 2008 9:20 AM by Chuck Butler

Filed under: Brazilian Real, Oil, China, Euro, Carry Trade, FOMC, Bank of Canada, Royal Bank of Scotland

On The Soapbox Again...

* Euro loses 1 1/2-cents... * Currencies get taken to the woodshed... * Bernanke joins Paulson, but why? * A China comment explanation......

Published Wed, Jun 06 2008 8:24 AM by Chuck Butler

Filed under: Currencies, Dollar, Brazilian Real, Inflation, China, Euro, Ben Bernanke, Alan Greenspan, Henry Paulson

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