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  • October 21 is in the books here on Wall Street. Here's the New York Minute

  • Now it was a quiet, indirectionalist day for the stock market and also for bonds, but there was a very clear direction for currencies

  • If you take a look at the Euro, you can see that it's now given up virtually all of its gains against the dollar for the year

  • That's following the Thursday announcement from the ECB, which has been interpreted as very dovish

  • That strength of the dollar has turned into strength against other currencies, most significantly the Chinese yuan

  • If you take a look at this chart, you can see that the yuan is now as weak as it's been against the dollar

  • at any point since very early in 2010 when the Chinese authorities decided to allow it to start appreciating gradually once more

  • I'm surprised this hasn't been talked about far more

  • Now if we take a look at the year-on-year rise in the trade-weighted dollar, you'll see something very significant for US companies

  • When the dollar is stronger over the year, that is a problem. It makes their overseas earnings look worse

  • After a very brief reprieve, we are back to a period where the strong dollar harms US earnings

  • And that's the New York Minute

October 21 is in the books here on Wall Street. Here's the New York Minute

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Direction from the dollar | New York Minute

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    20000011 posted on 2016/10/25
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