Comments
Transcript
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KGNevertheless, I find the question about Ukrainian UAH strength unexpectedly intriguing. I remember Ukraine issued UAH denominated bonds this summer and they were sold mostly to foreigners, thus lots of foreign denominated capital strengthened UAH exchange rate. But that still doesn't explain why it held the last week. Ed, maybe you could shed some light? Do you have any ideas?
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JCRe Ukraine, lived in Kiev for awhile now, basically the recent strength (which has tailed off, was in high 23s few weeks back versus the USD, now above 24 (versus 27 last year)) is due to several factors including, importantly, the continued issuance of Hryvnia-denominated by the country to foreign buyers (due to the high interest rates, bond buyers chasing yield, sound familiar?). As a result the CB has been buying hard currency to prop up their reserves and we've seen a strengthening the currency. Don't forget it's a managed currency and the Hryvnia didn't move much at all right after Brexit (!) Great video completely agree with Mr. Larsen. Financial conditions will continue to get worse. Even with yesterdays's 50 bps cut the US still has 100 bps to get to zero eventually and the Eurodollar trade is still viable.
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JCRe Ukraine, lived in Kiev for awhile now, basically the recent strength (which has tailed off, was in high 23s few weeks back versus the USD, now above 24 (versus 27 last year)) is due to several factors including, importantly, the continued issuance of Hryvnia-denominated by the country to foreign buyers (due to the high interest rates, bond buyers chasing yield, sound familiar?). As a result the CB has been buying hard currency to prop up their reserves and we've seen a strengthening the currency. Don't forget it's a managed currency and the Hryvnia didn't move much at all right after Brexit (!) Great video completely agree with Mr. Larsen. Financial conditions will continue to get worse. Even with yesterdays's 50 bps cut the US still has 100 bps to get to zero eventually and the Eurodollar trade is still viable.
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DLIs there any way to improve the audio quality? I actually wasn't able to make it through the last video because of the bursts of high pitch from the poor mic quality (I have sensitive hearing ...). Which is a shame because I'd prefer to listen/watch these as opposed to have to read the transcripts. Please consider investments in mics for guests. Thanks
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GGThis cutting of interest rates is absolute non-sense. This isn't even a liquidity-driven event. But cuts are the CoV vaccine right. Absolute Stupid! But let's just take fed funds to zero fast and then we are back to square one.
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DRA number of other central banks of countries on the US Treasury Currency manipulation watch list (in which US should rank #1 as the world's worst currency manipulator, hypocrites!), have cut interest rates already in 2020. Even those with stronger growth rates than US like some in southeast Asia. So, I'm not sure the SNB will be dissuaded now to not weaken the CHF, but I don't know at all. It seems unpredictable, but with the Fed already cutting more than everywhere in the world and poised to continue cutting more than everyone, I can't imagine any other CB be concerned about cutting, especially if their currencies are flat or gaining against the weak dollar. So many FX did gain against USD this week again, and USD languishes far below where it was 3+ years ago after Trump was elected.
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JWOne of the questions we did not get to was what Andreas thinks about the European Banks. Are they in trouble and if this is too generic a statement, perhaps the question is how he sees the Euro banking system repond to the upcoming macro environment he was talking about.
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JWVery interesting interview and thanks for taking my questions, even the one about the 'villains' :-)
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RYVVG ... Thanks Andreas ...