Entries filed under 'Currency'

    A Volatile Start to 2016

    January 8, 2016 4:00 PM by Timothy Paulson

    Here are some insights on the January market turmoil—and its implications for investment managers.

    As we pointed out in our year-end U.S. fixed-income market preview, 2016 held the prospect of continued volatility in financial markets, with flare-ups of risk and other uncertainty a likely feature of the post-rate hike world following the U.S. Federal Reserve’s policy tightening on December 16.  

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    China: Doing What They Said They Would

    January 8, 2016 2:43 PM by Harold E. Sharon

    Developing its own independent monetary policy means China no longer has to hitch its currency to the strong U.S. dollar. And that should be a positive, not a negative.

    Once again, China's currency and its stock market are dominating the financial news as we start the new year. Will this, as it did back in August, set the tone for the next six months? Or is this just the ongoing story of China following through with its announced plans to allow more currency flexibility and mobility, thus allowing it to finally have its own monetary policy rather than being beholden to the U.S. Federal Reserve’s interest rate policies? 

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    Emerging Markets: Reading the Tea Leaves on China's Currency Moves

    August 14, 2015 1:18 PM by Leah G. Traub, Ph.D.

    China first devalues—then supports—its currency.  What exactly is going on?

    After two days of depreciating its currency, the yuan (or “renminbi”), and effectively sending global currency markets into turmoil, China’s policymakers apparently decided late Wednesday (August 12, Shanghai trading time) that the currency had fallen far enough, at least for now.  

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    China's Devaluation Calculation

    August 11, 2015 4:38 PM by Milton Ezrati

    Beijing is betting that lowering the value of the yuan will help its faltering export sector. But the move may not immediately produce the desired economic boost.

    In a move to shore up its flagging export sector, China lowered the yuan’s value against the U.S. dollar by 1.9% on August 11, the biggest such move in nearly 20 years. This action, which essentially is a devaluation of the Chinese currency, sent the U.S. dollar and other currencies sharply higher in response.

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    Is This a Window of Opportunity for Emerging-Market Currencies?

    May 22, 2015 10:40 AM by Leah G. Traub, Ph.D.

    The European Central Bank’s continuing commitment to quantitative easing eventually will boost the economies of emerging markets and support their currencies.

    With the European Central Bank’s (ECB) ongoing commitment to quantitative easing, we do not expect much more euro appreciation versus the U.S. dollar.  But a window of opportunity for emerging-market (EM) currencies versus the euro may be  on the horizon. And the recent support for EM currencies versus the U.S dollar remains in play, at least for the short term.

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    Market Sentiment Sinks the Ruble

    December 23, 2014 9:08 AM by Leah G. Traub, Ph.D.

    Market contagion, however, should be limited.

    When a country is facing a currency crisis, as clearly Russia is, an interest-rate hike alone, with no other measures, is a sign of desperation and a lack of understanding of the underlying situation. So it was not surprising when the market punished the ruble following a late-night decision on Monday, December 15, by the Russian central bank to hike a key interest rate by 650 basis points, to 17%. 

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    U.S. Dollar: How Should Investors Approach a Mightier Buck?

    December 15, 2014 5:00 PM by Zane Brown

    In the last of a three-part series, Zane Brown offers some potential strategies to respond to the dollar's recent increase versus other currencies.

    In the first two parts of this series, we examined the causes of the ongoing rise in the value of the U.S. dollar—and its potential effects on the U.S. economy and corporate profits. Now it's time to take a look at the broader implications for investors.

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    U.S. Dollar: Stronger Currency, Stronger Economy?

    December 12, 2014 4:15 PM by Zane Brown

    In the second of a three-part series on the dollar's renewed vigor, Zane Brown looks at its potential impact on the U.S. economy—and corporate profits.

    In the first of our three-part series on the implications of a stronger U.S. dollar, we looked at the factors driving the greenback’s rise in value versus other currencies. Here in Part Two, we’ll consider its effect on the U.S. economy and corporate profits. (Part Three will examine the broad investment implications of dollar strength.) 

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    U.S. Dollar: Greener Pastures for the Greenback

    December 10, 2014 4:35 PM by Zane Brown

    Here's the first of a three-part series on the rise of the U.S. currency—and what it could mean for markets and the economy.

    What’s behind the recent strength of the U.S. dollar? What affect could it have on the economy? And what are the broad investment implications of this development? We’ll address each of these questions in a three-part series in The Investment Conversation. Here, we’ll tackle question number one.

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    Why Some Investors Might Holler for the Dollar

    November 28, 2014 10:54 AM by Lord Abbett Editorial Staff

    While past performance is no guarantee of future results, continued U.S. dollar strength bodes well for global equities.

    When a major institutional investor questioned how long the U.S. dollar’s strength could continue versus the flagging euro, three Lord Abbett partners—Leah Traub, Ph.D (an emerging markets debt and currency portfolio manager who provides support for the firm’s currency hedging strategies), Vincent McBride (responsible for establishing the strategy for the firm’s large cap international equity funds), and Harold Sharon (the firm’s international strategist)—responded quickly. Among their key conclusions:

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