Fed increases interest rate again – USD falls again

[JimboPSM]

The Fed raised its interest rate yesterday and, pretty well across the board, the market reaction to it was a fall in the USD.

This is the fifth increase in the US interest rate since November 2016 and, apart from the first one which occurred during a period of irrational exuberance, they have all failed to provide any sustained support (of more than a week or so) for the USD.

While it is a little too early to be certain, the continued lack of positive impact of Fed interest rate increases (remember, there have been five of them now since November 2016) are beginning to give the appearance that they are moves by the central bank to shore up the currency of an economy that, when viewed from the perspective of currency market movements, is showing early warning signs of being on course for failure.

It should be noted that, while being far from perfect, the currency markets have a history of being (compared to any other form of readily accessible economic indicator) ahead of the curve on the state of economies – e.g. just take a look at the performance of the USD during the Bush 43 years prior to “The Great Recession”.

If I have time I will update some of the more pertinent charts for the USD after Friday close this week (it gives time for the markets to settle from their initial, and possibly misleading, kneejerk movements).

[JimboPSM]

After a brief look at events that impacted the value of the USD last week, it quickly became obvious that with the degree of “noise” in the markets it would be nigh on impossible to separate the impact of the Fed interest rate from everything else that was going on.

However, what can be said is that on the day of the latest Fed interest rate increase the USD was down across the board.

Looking at the past week, what can also be said is that the fifth Fed interest rate increase since November 2016 produced no readily perceivable benefit to the international value of the USD.

It is possible that this week, after some of the currency indexes I follow are updated and the markets have had a little more time to digest events, I may see something that shows a different reality – but somehow I doubt it.

Note: while “noise” in the currency markets is not a new phenomenon, the sheer volume of it which has now been going on for month after month has, in my experience, no parallel.

Mind you, being realistic, what the hell else could be expected with the unrelenting chaos, confusion and incompetence that have been, and continue to be, the hallmarks of Scum 45 and his administration of spineless, obsequious fawning sycophants?

While trying to separate (to a reasonable verifiable degree) the actual impact on the USD of any one event may have become nigh on impossible, the bulk of the impact of all the events since 8 November 2016 can be seen in the movement of the USD (although it is still affected to some degree by noise, it is relatively insignificant - and it has the additional benefit of being easily tracked by anyone – assuming they have the intellectual curiosity).

The movement of the USD since 8 November 2016 can be summarised as:

• An initial short-lived period of irrational exuberance corrected by a fall, then further and further falls of the USD as the markets began to digest the full extent of the economic illiteracy of Scum 45 and his “policies” (economic, fiscal and geopolitical).

Keeping it local for UM, below are charts of the USD/THB rate since 8 November 2016 both in nominal and percentage terms.

USD/THB rate - daily movement since 8 November 2016:

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USD/THB rate - daily movement as a percentage since 8 November 2016:

• 

For additional context, this is an update to my annual average chart of the USD/THB rate from 2001 showing that the initial reaction to the economic, fiscal and geopolitical “policies” of Scum 45 is replicating the reaction to those of the last giant of GOP economic illiteracy, Bush 43.

Annual USD/THB rate since 2001:

• 

Just to show that the fall of 10.6% by the USD against the THB isn’t some kind of statistical outlier or aberration, here are charts for the USD/EUR (fall of 10.3%) and USD/GBP (fall of 12.1%) over the same time period (to enable easy comparisons with the USD/THB daily charts above I’ll just show the versions with the daily movement in percentage terms).

• USD/EUR rate - daily movement since 8 November 2016:

  

• USD/GBP rate - daily movement since 8 November 2016:

  

  
  It doesn't take 20/20 vision to see that they are broadly similar to the movement of the USD/THB rate.

Note: While I have only posted charts relating to the THB, EUR & GBP which show the USD falling dramatically, a diligent search will produce some currencies that the USD has actually risen against, however the ones I found are with currencies that I don’t actively follow.

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[ytrewq]

...and there isn't one [expletive] catalyst in sight to reverse the trend, and plenty that would exacerbate and accelerate the trend - which means the dollar death spiral will continue.

Knowing that = EASY to make money as it dies.

[felixcat]

And most don't seemingly know that this is the planned take-down of America that has been going on for many years now.
The FED increases are just the lighting of the fuse. Does anyone know that the chinesse gold backed "petro-yuan" is set to primere in a couple days? I didn't think so....
Its not the chinesse against America...its a concerted effort on both sides to take down one, so "the Power" can be shifted. Many of us have been watching this for years .

[thighlander]

did your friend Michael Moore mention to you that the Dollar is up 3% against the THB in 22 days?

[Lone Star]

did your friend Michael Moore mention to you that the Dollar is up 3% against the THB in 22 days?

55555

Be careful. Facts are kryptonite to some folks. The hair of some others explodes into flame.