Janet
Yellen appeared at a symposium earlier in the week, in conversation with
Christine Lagarde, Managing Director of the International Monetary Fund. Those
of us who trade Foreign Exchange were conscious of the possibility that either
of these two powerful women might make a comment or comments that could affect
currencies, in particular the US dollar. Would Ms. Yellen give any kind of
heads-up on the imminence or otherwise of the raising of core interest rates Stateside?
In
the event the conversation did nothing for Forex, but remarks were made by the
Chair of the Federal Reserve to the effect that, in her opinion, equity
valuations are high, and there could be potential dangers ahead for stock
investors. Equity markets on both sides of the Atlantic went into a bit of a
spin when these words were reported. The comment echoes that of one of her
predecessors, Alan Greenspan, who famously warned of “irrational exuberance” in
stocks. For the record, his remarks made no lasting difference.
There
are a number of pundits who seem to resent Ms. Yellen’s contribution, not least
Jim Cramer, who has a show on CNBC. He wrote a piece for The Street, entitled “Why
is Janet Yellen suddenly a stock commentator”.
One
reason might be that she is one of the foremost and, by virtue of her position,
one of the best informed, economists on the planet.
Choppy days in the Forex markets
Yesterday
and the day before were choppy, unappetizing days on the Forex markets. The
Pound Sterling is in a holding pattern in advance of an outcome of the UK General
Election, traders who watch the US dollar are holding their breath for the
Non-Farm payrolls number later today, and the Euro is bobbing about in consequence
of the lack of direction of those two of its major global counterparts. We must
watch and wait.
No comments:
Post a Comment