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Wednesday, November 7, 2012, 9:30 AM Have the safe-haven flows into Switzerland stopped? New data shows the SNB's foreign-exchange reserves fell for the first time in 8 months in October, suggesting the bank did not have to hoover up euros to keep in force the CHF1.20 floor. The cross currently stands at CHF 1.2065. Comment! [Global & FX]
Wednesday, November 7, 2012, 7:33 AM Sounding like he's setting the stage for another rate cut, Mario Draghi says he expects no change to the weak eurozone economy in the near future, and says the weakness has begun to affect Germany (earlier). Inflation risks are very low over the medium term, he continues. OMT, he contends, is not disguised financing of governments. Who said it was disguised? Euro -0.4% to $1.2763. Comment! [Global & FX]
Wednesday, November 7, 2012, 6:54 AM The greenback reflexively slid lower as the President's reelection became clear last night, but has since retraced all of the move. Were traders expecting a Romney victory followed by a rate hike? The Fed wasn't going anywhere no matter last night's result. 1 Comment [Global & FX]
Monday, November 5, 2012, 11:46 AM Catching up to Friday afternoon's big losses in the U.S., Europe closes sharply lower, the Stoxx 50 -1.1%, led by Spain -1.9%. The euro -0.4% to $1.2788. It's a 2-month low for the currency as Medley Advisors - its clients likely short euros and looking to cover - says the ECB is considering a December rate cut. 1 Comment [Global & FX]
Thursday, November 1, 2012, 3:18 PM A bit of deft trading allowed the SNB in Q3 to cut its euro holdings to 48% of reserves from 60%, all without shredding the value of the common currency. The bank - in order to defend the CHF 1.20 floor - has spent the last year accumulating euros at a furious pace, putting itself at risk should the markets attack. Increased during Q3 were its holdings of greenbacks, pounds, yen, and loonies. Comment! [Global & FX]
Wednesday, October 24, 2012, 9:12 AM Greece will be given an extension until 2016 to get its budget to record a 4.5% primary surplus, according to a draft MOU seen by the WSJ. It's hard to believe after what's transpired in past months, but some still believe the EU is going to let Greece go. It's not happening. European stocks and the euro shoot to session highs. Comment! [Breaking News, Global & FX]
Tuesday, October 16, 2012, 7:58 AM Germany is open to a precautionary credit line for Spain, reports Bloomberg. Spain is supposedly interested in a bailout "line of credit" in which the ESM would approve but not disburse any funds until Spain draws on them - more "bazooka in pocket" stuff. The euro adds 35 pips to already solid gains, +0.8% to $1.3049. 5 Comments [Global & FX, Breaking News, On the Move]
Wednesday, October 10, 2012, 11:35 AM Up until the QE∞ announcement, euro traders have generally been trend-followers, says CitiFX, but since, traders have gotten bearish even as the currency is basically flat. Combined with Citi's belief the euro is trading 300 pips rich to its swap-spread and the group recommends selling any rallies in the currency. 1 Comment [Global & FX]
Tuesday, October 9, 2012, 8:17 AM The sorts of things that happen when algorithms rule the market and assets trade with a correlation of 1: The euro dove nearly 80 pips in minutes about 5 hours ago, with the most convincing reason being Bloomberg mistakenly posting Spain's January 2024 bond as the nation's benchmark (rather than the Jan. 2022). The resultant 40 basis pop in yields forced sell orders in the euro (which has retraced much of the loss). Comment! [Global & FX]
Thursday, October 4, 2012, 9:00 AM Draghi: Responding to a question of whether a rate cut is even conceivable considering the "broken transmission mechanism," Draghi says the ECB's use of non-standard measures (OMT) "speaks for itself." In other words, the bank believes a rate cut will be of little use, so don't expect one. So the dollar will remain more favored than the euro as the borrowing currency for carry traders? 2 Comments [Global & FX]
Thursday, October 4, 2012, 6:42 AM Central bankers in Europe like to take their time about things. With EU economies grasping for air and ECB bond purchases nothing more than a promise, forecasters are in agreement the bank will hold off on a rate cut at today's policy meeting. The euro will "drop like a stone" should the ECB surprise, says Citi. The decision is due at 7:45 ET. Comment! [Global & FX]
Friday, September 14, 2012, 7:13 AM The dollar continues a big move lower following the Fed's open-ended QE announcement and Bernanke's anything it takes as long as it takes press conference. The euro +1% to $1.3116, the aussie +0.5% to $1.06 - neither of those handles have been seen for months. The loonie +0.4% to $1.0367, a 2012 high. Comment! [Global & FX, On the Move]
Thursday, September 13, 2012, 7:13 AM "With utmost determination," SNB President Jordan promises to uphold the CHF 1.20 floor on the euro/Swiss franc cross. "The franc is still high and is weighing on the Swiss economy." Locked at 1.2010 francs for months, the euro has soared to over 1.21 in recent days (yes, 100 pips is soaring) amid optimism the EU finally has a handle on the debt crisis. Comment! [Global & FX]
Wednesday, September 12, 2012, 3:13 PM Here's an interesting chart attempting to divine the direction of the euro/dollar exchange rate by measuring changes in the Fed vs. ECB balance sheet. When the Fed is growing assets faster than the ECB, the euro rises, and the opposite when the ECB expands quicker than the Fed. The euro's sharp move of late makes it vulnerable to a big sell-off if the Fed doesn't announce QE tomorrow. 1 Comment [Global & FX, Quick Ideas]
Tuesday, September 11, 2012, 3:24 PM Charting the path of the euro/dollar against the Fed's QE programs proves more instructive than Adam Button expected. The euro clearly has its own issues, but one could have done a lot worse than just holding euros during previous bouts of QE and then selling them when the programs ended. Comment! [Global & FX, Quick Ideas]
Friday, September 7, 2012, 7:35 AM Maybe the clearest sign the world has changed this week, the pressure on the SNB-imposed euro/Swiss franc floor of CHF 1.20 has lifted. Put in place a year ago as a flood of euros sought safe-haven in Switzerland, the floor has been under attack since, forcing the SNB to hoover up euros by the tens of billions. Now it's those short euros under attack as the cross lifts all the way to CHF 1.2146. Comment! [Global & FX]

URR Market Vectors Double Long Euro ETN

URR

Market Vectors Double Long Euro ETN