Wednesday, June 10, 2015

Foreign Exchange: Chalk One Up For FT Alphaville's Paul Murphy

Not just another pretty face.
Back on March 19 Mr. Murphy posted:

Have we just seen the last $ spike?
Quite a bit of motion sickness in the world of FX on Thursday, with the sharp pullback in the dollar that followed Chair Yellen’s dropping of the Fed’s “patient” pledge on Wednesday now all but reversed…
So conventional wisdom has it that we’re back to the ‘mighty dollar‘ narrative where, if anything, the hike in US rates, if and when it arrives, will be the next big currency-boosting event.
On the other hand, there’s an argument that the dollar might simply stall....MUCH MORE
The DXY closed that day at 99.07 after getting as high as 99.46.
Right now it's at 94.62 down 4.5% from three or so months ago.
In case anyone is curious , my response to the query posed in Mr. Murphy's headline was "No".

A couple weeks later Mr. Murphy's loyal minion, David Keohane, reiterated the downside with "This time is not different, USD edition".

This time my rejoinder was a more nuanced "I dunno although I tend to think not".