Welcome!

Agile Computing Authors: Liz McMillan, Roger Strukhoff, Pat Romanski, Elizabeth White, Darren Anstee

News Feed Item

USD to Stay Strong Despite the US Fiscal Cliff and the Fed's Open-Ended QE Programme

LONDON, November 7, 2012 /PRNewswire/ --

  • Obama winning a second term may mean a short term pop in risk appetite, but could mean the risk of a worse fiscal cliff and few policy developments going forward due to political gridlock
  • The US fiscal cliff is a real threat to the US economy, but certainly not to the US Dollar - quite the opposite
  • Latest e-book from Saxo Capital Markets launched, arguing the Fed's QE will not kill the US Dollar

The US Dollar will remain a strong currency in the medium term despite the looming US fiscal cliff and the harmful effects of the Federal Reserve's open-ended and theoretically unlimited quantitative easing (QE) programme, says Saxo Capital Markets UK.

John J. Hardy, Head of FX Strategy at Saxo, comments:

"Obama's re-election means political and Federal Reserve business as usual in the US - but also means plenty of uncertainty surrounding the fiscal cliff.

In "The Dollar & the Fed: QE won't break the buck", the first e-book in Saxo Capital Markets' FX Debates Series, Saxo envisages that the USA and its currency are in a far superior position than the other major countries thanks to stronger fundamentals. As a consequence, the Dollar is likely to stay stable or appreciate over the next 12 months.

Hardy continues:

"The Dollar still looks better than most other major currencies regardless of the fact that QE is not working and is not the right prescription for the economy.

"The Federal Reserve's aggressive quantitative easing programme, while it may have kept the economy on a kind of life support and prevented a steep deflationary environment in the initial phases of the deleveraging cycle, has done little to address the structural problems of the economy. In fact, at this point, it risks inflicting harm rather than helping. It presents risks of new asset bubbles - most dangerously in commodities - and keeps too much of the worst kind of debt in the system alive while meting out negative real interest rates on savers.

"The way Obama and the lame duck Congress tackle the impending fiscal cliff will be of crucial importance for the US economy. Ironically, the worse the fiscal cliff, the better the Dollar will likely do because the US Dollar is so linked to global risk appetite and the threat of a US recession would likely see the USD appreciate.

"Another big USD event in the pipeline is next year's appointment of a possible new Fed Chairman if Bernanke decides not to run or if the political environment proves hostile to nominating someone of Bernanke's always-QE-all-the-time stripes. The process starts as early as mid-2013 and could prove quite a distraction. Any threat to the Fed's QE gravy train or suggestion that someone of a less-dovish bent could replace the Fed chairman could see the USD soar.

According to Saxo Capital Markets, the US economy is still better placed relative to other large countries. The main factors supporting the Dollar include:

  • A difficult transition period in China - the country needs to make large structural adjustments in order to boost domestic consumption to replace dwindling demand from abroad;
  • The 'reshoring initiative' has started as US manufacturing costs have become far more competitive for some companies relative to China.
  • The 'Shale Gas Revolution' in the US means producers can look forward to vastly cheaper energy than the rest of the world pays for gas-driven electricity and heating. It's a boon to consumers as well.
  • The US demographic profile if far younger than Japan and Europe where the proportion of pensioners is soaring and will continue to do so far more quickly than in the US for decades;
  • The US Government could consider a second round of the Homeland Investment Act (HIA), which could stimulate the economy without adding to the fiscal burden by allowing US corporations to repatriate foreign profits with either no tax or very little. The potential USD-positive flow from this alone is in the hundreds of billions of USD;
  • The Eurozone crisis weakening the Euro;
  • The currencies of the commodity economies (e.g. Canada and Australia) are currently overvalued.

The #FXdebates series of articles will be published bi-weekly over the next four months, leading the way to an event in February 2012 in collaboration with Bloomberg LINK.  

The other articles in the #FXdebates series will focus on:

  • Gold - Just another currency?
  • The Euro in Crisis
  • Currency Wars: Battle Of The Weakest
  • Yuan Diplomacy

For more information please see: http://uk.saxomarkets.com/fxdebates

Follow the debates via twitter: https://twitter.com/SaxoMarketsUK

Hashtag: #FXdebates

About Saxo Capital Markets

Saxo Capital Markets UK Limited is a wholly owned subsidiary of Saxo Bank A/S, the parent company of the Saxo Bank Group, an international financial services group specialising in trading and investment across global financial markets. Saxo Bank has operated in the UK since March 2006, initially as a branch of Saxo Bank A/S and since 1 January, 2012 as Saxo Capital Markets UK Limited.

Saxo Capital Markets UK offers private investors online trading and investment in FX, CFDs, ETFs, Stocks, Futures, Options and other derivatives, and online wealth management for Funds, Shares, ETFs, Certificates and Bonds. Saxo Capital Markets UK also offers online trading services to a broad institutional client base including Hedge Funds, Introducing Brokers and Money Managers through our award-winning trading platform SaxoTrader, SaxoWebTrader and SaxoMobileTrader and Saxo's B2B/API services.

Additionally a large base of Banks, Brokers, Asset and Money managers, utilise our award winning white label solutions, in order to provide their clients with access to all or some of our trading platforms and associated liquidity.

Find out more about FX Trading opportunities with Saxo Capital Markets.

Media enquiries

Uriel Alvarado Cancino, Chief Public Relations and Marketing Officer, Saxo Capital Markets UK
+44-(0)207-151-2026
[email protected]

Nicholle De Beer, Public Relations and Marketing Manager, Saxo Capital Markets UK
+44-(0)207-151-2024
[email protected]

Smithfield
+44(0)20-7360-4900
[email protected]

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
SYS-CON Events announced today that CDS Global Cloud, an Infrastructure as a Service provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CDS Global Cloud is an IaaS (Infrastructure as a Service) provider specializing in solutions for e-commerce, internet gaming, online education and other internet applications. With a growing number of data centers and network points around the world, ...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
Big Data has been changing the world. IoT fuels the further transformation recently. How are Big Data and IoT related? In his session at @BigDataExpo, Tony Shan, a renowned visionary and thought leader, will explore the interplay of Big Data and IoT. He will anatomize Big Data and IoT separately in terms of what, which, why, where, when, who, how and how much. He will then analyze the relationship between IoT and Big Data, specifically the drilldown of how the 4Vs of Big Data (Volume, Variety,...
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. Big Data at Cloud Expo - to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is...
An IoT product’s log files speak volumes about what’s happening with your products in the field, pinpointing current and potential issues, and enabling you to predict failures and save millions of dollars in inventory. But until recently, no one knew how to listen. In his session at @ThingsExpo, Dan Gettens, Chief Research Officer at OnProcess, will discuss recent research by Massachusetts Institute of Technology and OnProcess Technology, where MIT created a new, breakthrough analytics model f...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm ...
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
From wearable activity trackers to fantasy e-sports, data and technology are transforming the way athletes train for the game and fans engage with their teams. In his session at @ThingsExpo, will present key data findings from leading sports organizations San Francisco 49ers, Orlando Magic NBA team. By utilizing data analytics these sports orgs have recognized new revenue streams, doubled its fan base and streamlined costs at its stadiums. John Paul is the CEO and Founder of VenueNext. Prior ...
Technology vendors and analysts are eager to paint a rosy picture of how wonderful IoT is and why your deployment will be great with the use of their products and services. While it is easy to showcase successful IoT solutions, identifying IoT systems that missed the mark or failed can often provide more in the way of key lessons learned. In his session at @ThingsExpo, Peter Vanderminden, Principal Industry Analyst for IoT & Digital Supply Chain to Flatiron Strategies, will focus on how IoT de...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often ...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...