Morning Commentary: “Is it Safe?”

Foreign Exchange - Morning Commentary

“Is it Safe?”

Share this story:
Alan Rose
Alan Rose
Foreign Exchange Senior Trader
We have been writing for a number of months about the extraordinary low volatility and lack of directional movement in the U.S. dollar (DXY index). While there have been short lived bullish and bearish trends over the past six months, the DXY index is almost exactly where it was in back in November 2018.
But within that story, there have been individual currencies that have been trending. One of the key currencies that has been in a steady decline since January 10th is the Swiss franc (CHF). Since the start of the year, the CHF has declined by nearly 4.0%. This would seem highly unusual as this currency, along with the Japanese yen, is a traditional safe haven currency.  With uncertainty surrounding Brexit, the Fed's dovish pivot, global uncertainty, Washingtonian politics etc., there does not seem to be a catalyst for the "all-clear" signal just yet.
Yet both the CHF and the Japanese yen have been weakening steadily since the beginning of the year with the CHF falling almost twice as fast as the Japanese yen. When fundamentals become muddled and subjective, price action becomes paramount. Today’s move by the CHF brings the CHF to its weakest point since January 2017. Investors and traders seem to be saying that the CHF is no longer needed as a safe haven currency and combined with other weak points in Europe, almost all European currencies continue to be beaten down.
  • Oil prices continue to march higher again today (yesterday's lead story) and have been trending higher all year long.  While it helped petro currencies (Norway and Canada) yesterday, the U.S. dollar's overall strength against major and emerging market currencies is trumping the higher oil prices with almost all major currencies weaker today.
If we can help you with any Foreign Exchange needs, please email or call (800) 447‑4133.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Facebook Twitter LinkedIn Google Plus YouTube
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Unsubscribe from this list  |  Update email preferences
This message has been sent to Please do not reply to this email. To ensure the delivery of future emails, please add to your email address book or safe sender list.
Copyright ©2019 City National Bank – All Rights Reserved.
350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC


Popular posts from this blog