Category: Economy

Business, Ecommerce, Economy

Hot Off the Press! Dollar Down as the Economy Grows!

Hot Off the Press! 

Dollar Down as the Economy Grows!

 

The dollar index has softened slightly towards one-year lows as the Euro moved to within striking distance of 2 ½ years.  Canadian and U.K currencies remained stable for the most part.  The Greenback strengthened on good news about the U.S. economy this week.  Durable Goods soared by the most in nearly three years!

However, it appears the dollar will have trouble sustaining its good news after Congress failed to pass any measure whatsoever to repeal the current healthcare law.  This inaction endangers the Administrations entire economy supportive agenda.

Euro Bump!

The inflation rate in Germany has seen an upturn as of late resulting in a strengthening of the Euro… also having a positive effect on the inflation rate in the Euro-Zone as well.  For this reason most economic indicators continue to point to healthy expansion in the European Union throughout the rest of 2017.

While wage growth is still relatively weak the fact that the last two years has seen low inflation (primarily due to low fuel prices) has allowed consumers to save more.  Now that inflation is edging upwards again, it is expected that real wage growth is expected to remain depressed…resulting in less disposable income for consumers.

Amazon….again?

Even though Amazon posted weaker than expected earnings reports…most major investment analysts are still calling for “bullish” expectations for the digital marketing behemoth.  In short, Analysts and investment houses are suggesting that the actual earnings reports matter less that the simple fact that Jeff Bezos is a “…one-of-a-kind CEO,” that will drive Amazon to success no matter what!

Even though Amazon stock was down 3% mid-morning Amazon has been one of the best-performing large-cap stocks in the market over the last few years.  Its shares rallied 39.5% year-to-date through Thursday versus the S&P 500’s 10.6% return through the same time line.

PSD2…

The EU has authored a new directive that is most likely going to be adopted in the coming few months that will change the way banking is done forever in Europe….and as Europe goes, so goes the world.  The directive is known as the Payment Services Directive (Revised).  This directive (if adopted) is set to accelerate the competition and digital disruption that is already reshaping the financial services industry across and beyond Europe.

These new directives and rapidly changing payment protocols are poised to completely upset the traditional banking model of how banks now contribute to daily banking support provided for customers.  One example involving the U.K banking infrastructure indicates that by the year 2020 banks in Britain will lose up to 43% of their banking revenues based on payment processing!

In the weeks to come, Mosaica will continue to provide more intelligence on this single very important issue facing the foreign currency exchange industry.  We will be providing sensitive information to our clients so they are able to prepare for what is just around the corner regarding PSD2.

Reach out to MosaicaFX to set an appointment with one of our Executive Account Managers so they can tell you what steps you need to take today to offset the major changes that this major PSD2 Directive will result in that will no doubt affect your business model and profits as they relay to the EU.

 

Business, Economy

New Ecommerce Ideas

New Ecommerce Ideas

So where can you come up with new ideas on what to sell on your digital marketplace?  Sometimes great ideas hit you when you least expect it.  However, it is more likely that you will be successful in bringing new products to the marketplace if you actively search for them.  But…where should you search?

The obvious place to search for new products is the World Wide Web.  The internet contains a virtual smorgasbord of new ideas and the inspiration for ones that are yet to be invented.  However, you can only spend so much time trying to sift through thousands of contact pages on your computer.  It may actually make more sense for you to consider some suggestions.

Where Should You Begin?

  • Consider the Obvious – pay attention to what your local businesses are carrying in their stores. Visit EBay and other search based digital retail verticals to see what most in demand is.  If you find something that is always sold out or you think you could improve on….maybe you should consider such an endeavor.
  • Check Out Consumer Driven Media – read what is trending hot! Take a look at digital (and traditional magazines) to see what is getting the most press coverage.  It may even be that current trends may lead you to a break-through concept that hasn’t been published yet.
  • Use Industry Leaders as Research Sources – many times industry insiders or influencers have their finger on the pulse of an industry. They may even occasionally release a bit of information that can provide insight as to what other companies are planning.  These industry leaders try hard to “scoop” each other on new trends.  You never know what you may learn from them.
  • New Product and Trend Review Sites – there are a lot of digital marketplace sites you can go to that can provide you the “latest and greatest,” of products being released. When you visit these sites they may spark innovation in your mind to develop accessories for some of these new products.  Remember, you don’t have to be the first to market…just an acceptable alternative to the first!
  • Wholesale Marketplaces – don’t forget to visit the obvious places for new product development like Alibaba, Tradekey, Global Sources or Made-in-China. These are great places to stir the creative juices!
  • Consumer Driven Markets – take a look at the most common places one can begin purchasing new products as a consumer, for new ideas. These could include Kickstarter, Etsy, EBay, Amazon and AliExpress.  You may see an idea that could be improved upon or marketed into a specific vertical that as yet is untouched.

 

Don’t Overlook That Old Dinner Napkin!

While all of the aforementioned places are worth considering, don’t overlook your old ideas as well.  You may have an idea that was just a pipe-dream ten years ago, but today the technology has advanced enough to make such a scribbled concept easily attainable.

There are a million places to come up with great ideas and today there are almost an infinite number of companies that can help you design, manufacture and market those ideas.  Henry Ford once said, “…he never met a new invention he didn’t like!”  He went on to say, “…he sometimes found it disappointing that not every customer was a smart as his ideas.”  In other words, don’t be afraid of the idea….just be cautious of the soundness of it as a marketable product.

At MosaicaFX we do our best to help support our client’s new ideas by helping them hedge their currency management needs and to protect their profits that are needed to drive these new ventures.  Reach out to one of our Executive Account Managers today to hear what we can do to support your international marketplace projects today.

 

Business, Economy

U.S. Banks A Better Bet!

U.S. Banks A Better Bet!

Ever since the 2007-2009 financial crises, the banking industry in the United States has been under a great deal of scrutiny….and rightly so.  There was always a great deal of finger-pointing that took place after that economic debacle.

The banks said it was poorly conceived and mandated lending requirements the government forced on them and the government said it was the banks desire to pump up their profits that created the banking crises.  The only thing everyone could agree on was that drastic measures had to be taken to stabilize the largest banks in the U.S., and that a repeat of that catastrophe could be unrecoverable.

Annual Stress Test Results…

Banking regulators devised a series of “stress tests,” that would rate how effectively the banks were managing their assets and even more importantly…their debts.  It was also mandated that these banks would need to improve their risk management procedures.

Fed Governor Jerome Powell, who has been acting as the regulatory lead for the U.S. Central Bank, said the process, “…has motivated all of the largest banks to achieve healthy capital levels and most to substantially improve their capital planning processes.”  The banks own plans on how they will use the extra capital will not be known until they make their own announcements.

34 Pass!

On Wednesday, June 28, the Fed said all of the 34 banks included in the mandated sampling had passed the second, tougher part of its annual stress test.  This was great news for the banking industry in general.  Overall, the big banks all cleared the Fed’s performance bar.

While Capital One Financial Corp, must resubmit plans because it did not appropriately account for risks in “one of its most material businesses,” most believe that even though the Fed did not specify which business, speculation is that it is either in their credit card lending or auto lending divisions.  Both areas have been “flagged,” by bankers and analysts as showing signs of weakness.

Capital One has until the year-end to deliver an improved submission, but the Fed did give it permission to move forward with its plan until then.  American Express also resubmitted a plan with reduced Central Bank requests thus improving its capital ratios.

However, the other big banks including JPMorgan Chase & Co., Bank of America Corp, Wells Fargo & Co., Citigroup Inc., Goldman Sachs Group Inc and Morgan Stanley all also cleared the Fed’s performance bar, thus sending strong signals that the U.S. Banking Industry is on sound footing again.

A Steadier Pulse….

MosaicaFX monitors not just foreign currency markets but also the U.S. financial and banking markets.  It is our belief that it is important for your profits to have safe and secure domestic cradles as well.  Our Executive Account Managers realize that the foreign currency markets are dependent upon the banking institutions that harbor international and domestic funds to be stable and solvent.

We keep our finger on the pulse of the financial markets to ensure our clients are never caught off guard. Let us know when you would like a briefing on how your currency profits can be protected by our currency management and hedging strategies….all the way to the bank!

 

Business, Country, Economy

Made In China

Made In China

If your company is considering contacting factories in China to find a manufacturing partner to produce products you can sell in the digital marketplace, then it is imperative that you approach this process with your eyes wide open.

It can be very enticing to try and increase your profit margins by actually going to the “source” of a hot selling product.  However, for it to be worth that effort…you must be smart, savvy and a bit cynical in securing a manufacturing partner behind the Great Wall.

It is quite common today to develop your own manufacturing conduit from the international marketplace.  Many companies will tell you that once they decided to bypass a middle-man who “brokered,” their product orders, profits increased as expected.  What you may not hear quite as often is that if they had it to do over again….they may have reconsidered such an endeavor.

Profit is no Prophet!

The obvious reason to go directly to the factory that makes a specific product you are selling is to increase your profit margin by cutting out a layer between you (as the reseller) and the factory as the manufacturer.  However, the process of managing that direct relationship can come with so much baggage that it may not be worth the additional points in your pocket.

In other words, you must be prepared to deal with the fact that the level of additional profit you make on the product is not indicative of how much additional effort you may be required to provide to keep the project on track.  There is a reason not every company is dealing factory direct with manufacturers out of China.

There is an old saying that goes, “…time is money.”  In China the translation of that saying is “…time will make money.”  This is the belief that the longer a process can be drawn out through tireless negotiation, the more likely the party more committed to that process will benefit.

Tips & Tricks…

You must enter this process with the following assumption in place.  There are good, honest manufacturers in China and there are bad, dishonest manufacturers in China.  There are even good, dishonest manufacturers in China.  Mitigate your expectations on easily locating the good, honest ones as you will no doubt have to sift through the rest first.

Below are some tips and tricks you may want to consider trying to avoid wasting time and becoming frustrated with this effort.

  • Start With References! When you get ready to talk to a manufacturer in China, you should be looking for a couple of common denominators.  First, they need to have active relationships (over 2 years) with other U.S. based companies…AND they must be willing to provide you those references as needed.  CALL THOSE REFERENCES and don’t take for granted they must be good if they are provided.  Even good references may share “issues” with you.
  • If they don’t have someone on staff who speaks fluent English, move on! It is imperative that you are able to have detailed, direct, accurate conversations with someone at the factory.  If you don’t speak Mandarin… then it falls upon the factory to speak English.  You will find many factory representatives that speak “Chinglish.”  This is a form of broken English that gets worse when the subject gets more pointed.  In other words, they may understand everything you are saying when discussing the weather, but, oddly they develop language issues when discussing your invoicing, scheduling delays, pricing and technical issues.
  • Contract with an outside QC Inspection company. You will need to contract with a Chinese based Quality Control inspection company to review your products before they are shipped to you.  This company should represent your interests with the factory regarding the production of your products.  They can help you increase the quality of your product as well as help control costs associated with returns and warranty issues.
  • Be prepared to have to eventually visit the factory personally. This may not be as big a requirement if you are having small “widgets,” manufactured as opposed to more technologically advanced products that are intricate and costly in nature.  However, developing a personal relationship with project managers and factory owners can only help as your project matures moving forward.

The Bottom Line…

You may find that the few points of profit that you paid your middle man (broker) to manage the process and the relationship with the factory was a bargain at the end of the day.  However, you may decide that addressing the ongoing accounting issues, constantly renegotiating the production schedules and QC requirements and overseeing the shipping logistics are more than worth it if your profit margin widens from those efforts.

At MosaicaFX we can help protect your profits developed from international transactions.  We also can assist your business in many other areas. Don’t waste another minute and set up a meeting with one of our Executive Account Managers today.

Manufacturing in China may be the key to growing your bottom line.  Counting on someone like MosaicaFX to help navigate this challenging process could be the key to your success.

 

 

Business, Ecommerce, Economy

A Penny for Your Thoughts?

A Penny for Your Thoughts?

Over the last five days our MosaicaFX research team has read dozens of domestic and international articles regarding the economy, foreign exchange rates, currency values, e-commerce and developmental interest rate models.  What have we discovered?  Even among the so called experts…their…is…no…consensus.

Let’s take the U.S. Dollar for example.  Below are some headlines that ran recently…all on the same day.

  • US Dollar Rebounds Ahead of FOMC
  • The death of the US Dollar rally (as the Loonie rises from the grave)
  • US Dollar Retesting Session Highs
  • The US Dollar is slipping as the Fed begins 2-day meeting
  • US Dollar Rises Against Majors

It is apparent that as trends, graphs, charts and spreadsheets are analyzed that data is still interpreted by people.  When numbers are crunched by software applications and then applied to historical data for comparison…there is still a human element that must be entered into the equation.

The Human Element

The psychology of financial expansion is a term that has been derived from an understanding of how much influence personalities and emotions can exert on domestic economics.  It is accepted that a robust personality at the helm of a corporation can by force of sheer will drive the success (or failure) of that business.  Less accepted, is that same general principle on a macroeconomic scale.

However, many economists believe that it is just such a force of sheer will that has helped to restart the U.S. economy somewhat.  With the election of a devout businessman into the White House, some in the private sector credit President Trump’s overt commitment to supportive business policies that has actually created an enthusiastic endorsement by contributors to the economy.

It is this human element of overt enthusiasm that seems to be buoying the ebbing lows associated with the pitfalls of negative geo-political and global economic news.  In other words, when bad things happen (such as terrorist attacks, natural disasters, financial calamites, etc.) our financial institutions and economies overcome them it seems because the will of the nation requires it.

The Invisible Hand in the Marketplace…

It was Adam Smith who in the 18th century developed a concept to describe the “invisible” forces of the free market.  Smith’s description of the invisible hand theory stated that individuals pursuing their own interests frequently promote the good of society’s interests overall.

Smith more directly stated this theory as, “…It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self-interest.”  He went on to state, “…We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their (personal) advantages.”

Stated another way, the pharmacist doesn’t show up and work long hours mixing prescriptions to heal our bodies out of their love for their fellow man (in general) but because they wish to make a mortgage payment and pay their electric bill.  It is only by them pursuing their own interests that we benefit as well.

The Bottom Line

This is the era of information overload for most people.  The sheer amount of data and information available through the internet, television, radio, e-blasts, magazines, etc. is so voluminous that the average individual cannot process all of it…and if they are able to wade through it, most likely it will be after their window to apply that information has closed.

The skill set that allows you to successfully drive your business is based on your experience and knowledge in the field or industry you have chosen.  Yet you no doubt understand that for you to navigate the dangerous shoals of international business, it is important that you partner with other experts who not only can process numerical data…but can also interpret or feel the human element that impacts the black and white financial market your business depends on.

MosaicaFX prides itself on not just providing you information and our interpretation of what the market is headed for…but we do something that most foreign exchange companies forget to do.  We ask our clients what they want out of our partnership.

Our goal is to learn what our client’s needs are and then anticipate what their business model will need from us so they can be successful.  MosaicaFX has Executive Account Managers that will work to protect your profits through state-of-the-art hedging strategies and we will never forget to ask the important questions.

A penny for your thoughts?

 

 

Business, Country, Economy

Is Brexit…Broken?

Is Brexit…Broken?

As of 10:45 pm Thursday night, June 8th 2017…the Conservative (Tory) party of Prime Minister Theresa May was trailing the Labor parties Socialist Leader Jeremy Corbyn 182 seats to 190 seats in the Snap Election called for my the current PM.

The significance of the Prime Minister’s Conservative Parties thumping in this election by the Labor Party is that it is essentially a vote of “no confidence,” in the current Prime Minister and her party being in control of Britain’s Parliament.

Exit polling commissioned by the U.K.’s three main broadcasting networks and released after the polls closed at 10:00 pm, projected the Tories to hold on to 314 seats (down 16 from their total during the last Parliament) while the Labor Party was forecast to gain 37 seats bring their total to 266.  The Scottish National Party was projected to slip 20 seats down to a total of 34 and the center-left Liberal Democrats were projected to end up with 14 seats…up five from the last Parliament.

Based on these exit polling numbers and if they hold true, means that effectively the ruling Conservative Party would hold the same number of seats as the three other Parties combined…thus resulting in a “hung,” Parliament!

What Does It All Mean?

Officially a Party in the U.K. needs to win 326 seats to gain a majority in the 650-member House of Commons.  However, the actual magic number is closer to 323.  The Speaker does not vote and members from Sinn Fein, the Irish Nationalist Party which won four seats in the last general election in 2015, do not sit at Westminster.

While the Conservative Party would remain the largest single party, the fact that Labor Leader Jeremy Corbyn is now close to the threshold of Number 10 Downing Street means that if these numbers are accurate, the projected result could lead to the end of Prime Minister May’s tenure.

If the outcome of this election is as currently projected, it leads to a series of questions that are tough to answer.  First, PM May’s decision to schedule this snap election will now be second-guessed for decades.  As Craig Oliver, a spokesman for former Prime Minister David Cameron was quoted saying, “It was the biggest gamble a politician has taken in a long time and if the exit poll is right, its’ failed.”

The second question it begs is why would Corbyn, a 68-year old socialist who has fought tougher anti-terrorism laws for decades appeal to voters?  It all the more confusing that after the recent terrorist attacks in the U.K. voters would consider someone who would most likely stall the strengthening of anti-terrorism protocols and actions.

Brexit or Fixit?

It is also no secret that Corbyn is not a proponent of the U.K. leaving the EU.  IF…and at this point it is a big IF…May is forced to resign as Prime Minister, then a great many questions will need to be answered.  Will Brexit remain on track?  What shape will the negotiations take that are in the offing for a successful resignation of Britain from the EU? How will this election affect the GBP?

Most voters polled indicated that their thoughts were not on Brexit during this election but squarely focused on homeland security.  Rachel Sheard, who actually cast her vote near the site of the London Bridge Attack, said the election had not gone as expected…and that it certainly wasn’t about Brexit for her.  Sheard said, “…I don’t think that’s in the hearts and minds of Londoners at the minute, (not) nearly as much as security is.  It was very scary on Saturday.”

The Bottom Line…

It is possible that the actual election results may vary a bit from what we are suggesting in this article.  That is just the risk associated with writing an article based on exit polling.  However, one cannot overlook the impact of even a close election for May.  For many security-conscious Britain’s a loss for the Conservative Party is more than they can contemplate.

The GBP has already weakened over the recent days and a “hung” Parliament can only cause even more volatility for it and the Sterling in the currency markets.  Senior MosaicaFX Management has already prepared a currency management strategy to offset these latest political developments and protect your profits.  Contact us today so our Executive Account Managers can detail these strategies for you.

 

 

Economy

Batten Down the Hatches!

Batten Down the Hatches!

…The Hurricane Season May Have its First Storms on the Way

The Atlantic Hurricane season officially starts June 1st each year but it is normally unlikely to see any real storms until much later in the season.  However, it is highly possible we may see some early storms starting this week…at least as far as how they will affect currency rates.

In fact, the argument could be made that the recent terrorist attacks in the U.K. and France were tragically violent precursors to the new-norm….which is nothing can be counted on as being normal.  Between fears of terrorism and the political and economic upheaval driving the media headlines, it is amazing that currency exchange rates have not yet burst into flames.

June 8th is what many who trade in the international currency market as well as international economic analysts are referring to as a risk-event laden Thursday.   A trio of major events is slated to occur on the same day this week.  Many would call it a “perfect storm,” of political intrigue.

Tri-Lateral Upheaval…

In Britain this coming Thursday a new Prime Minister may be elected.  Theresa May is still leading in most polls but by the narrowest of margins at this point.  No doubt the latest round of terrorist attacks in the U.K. will either add volume to her call to crack down on immigration or undercut confidence in her ability to keep the Empire safe.

On the same day that the U.K. is focused on their national elections, the European Central Bank will be issuing a much anticipated policy decision coming on the heels of its June meeting.  Much uncertainty still exists regarding the direction the ECB may take regarding its position on static interest rates.

However, since most current data seems to be trending in the right direction for the EU, it is possible the Bank may shift a neutral position from one of easing rates.  Some believe the ECB may actually consider moving towards actually reducing stimulus.  Only time will tell what the ECB may choose to do as the latest retail sales data showed no more than a 0.1% rise for the month of April.

Finally, this Thursday will result in the much anticipated testimony of former FBI Director James Comey on Capitol Hill.  While conventional wisdom seems to indicate that no likely “bomb shells,” will be dropped during the testimony….the truth is no one really knows how Comey’s testimony will proceed.  If by some chance any overly negative fallout from this Hearing drives the headlines of the day…it is to be expected that the dollar will slip even further.

The Bottom Line…

The potential for sudden and explosive volatility exists for major currencies over the coming days.  That could spell either good or bad news for the Greenback, Sterling, Euro and others that may occupy this basket of currencies.

As we have already said, the ex-Director of the FBI’s testimony could cause the dollar to slip on troubling comments during the hearings.  The Sterling, while currently slightly higher, is still on shaky ground depending on if Ms. May’s Conservative party picks up more seats in Parliament or not and the Euro is in a holding pattern as it waits to see which way the winds blow during the ECB meeting this week.

More than ever, it is imperative that companies that rely on effective foreign currency trading develop strong relationships with currency management entities they can trust.  MosaicaFX is one such company that can be counted on to diligently protect your profits and work to provide the most up-to-date data and trending information to our clients.

We would encourage you to make an appointment to speak to one of our Executive Account Managers today to find out what hedging strategies make the most sense for your company and your business model.  We look forward to speaking with you today.

 

 

Business, Economy, Uncategorized

Our $74 TRILLION Global Economy

Our $74 TRILLION Global Economy

The latest GDP numbers from the World Bank were released a few weeks ago and the rankings are in.  Most people will be astounded to actually see the relative share that each country and/or continent or geographic region represents in the overall global economy.

Most analysts will be amazed to see how certain entities actually rank against others.  At the same time, it is thought that a great deal of other data can be extrapolated from such raw data as well.  Let’s start with some basic rankings.

The Top 20!

Rank Country GDP % of Global Economy
#1 United States $18.0 Trillion 24.3%
#2 China $11.0 Trillion 14.8%
#3 Japan $4.4 Trillion 5.9%
#4 Germany $3.4 Trillion 4.5%
#5 United Kingdom $2.9 Trillion 3.9%
#6 France $2.4 Trillion 3.3%
#7 India $2.1 Trillion 2.8%
#8 Italy $1.8 Trillion 2.5%
#9 Brazil $1.8 Trillion 2.4%
#10 Canada $1.6 Trillion 2.1%
#11 South Korea $1.4 Trillion 1.9%
#12 Australia $1.3 Trillion 1.8%
#13 Russia $1.3 Trillion 1.8%
#14 Spain $1.2 Trillion 1.6%
#15 Mexico $1.1 Trillion 1.5%
#16 Indonesia $0.9 Trillion 1.2%
#17 Netherlands $0.8 Trillion 1.0%
#18 Turkey $0.7 Trillion 1.0%
#19 Switzerland $0.7 Trillion 0.9%
#20 Saudi Arabia $0.6 Trillion 0.9%

 

The Continental Divides…

The difference in the percentages on how the global economy is divided by continent is even more telling than by country.  The global economy is like a living, breathing organism in many regards.  It expands and contracts depending on how much in consumes and produces.

Africa, abundantly rich in natural resources makes up just 1.52% of the world engine known as the global economy.  Asia on the other hand is responsible for 33.84% of the world economy.  When you consider that China, Japan, India, Russia and Malaysia are all included in those numbers…Asia is a force to be reckoned with.  Australia on the other hand reflects no more than 1.81% of the combined economies.  Europe is a story unto itself.  The latest World Bank numbers indicates that Europe reflects a total of 22.27% of the total economy even though it represents the European Union.

North America is not the “big dog,” when it is looked at as a total economic number by continent.  While the United States is the single largest economy in the world, the North American cumulative number is 27.95%…primarily because Mexico and Canada are minor contributors on the world stage when it comes to the global economy.

Numbers for South America are rather dismal when you consider the sheer size of land mass and population.  A total of 4.07% of the global economy is generated in South America.  This number is expected to slip a bit more with Brazil’s economy stagnated and Venezuela actually posting negative numbers at this time.  The rest of the world makes up around 9.41% of the balance of the world engine that drives the global economy.

The Bottom Line…

The data compiled in this article was developed by Jeff Desjardins and taken directly from World Bank data recently released.  It is apparent that the raw percentages do not reflect national debt rates or even the EU as a standalone entity.  Some financial analysts also believe that the analysis fails to take into account other data that distorts the balance of economic power such data should reflect.

The lesson that this data proves is that even relatively simple GDP calculations are anything but simple.  This is why it is imperative that partnering with experienced currency management groups can mean the difference between retained profits and lost profits.

No one knows better than currency traders that the health of an economy can make or break foreign currency values.  Allow our Executive Account Managers to explain how MosaicaFX can best support your business needs in a global economy.

Business, Economy

Running of the Bulls?

Running of the Bulls?

MosaicaFX makes a concerted effort to provide our clients the most accurate information to assist them in making the right decisions for their business.  Lee Iacocca is attributed with saying, “…there are no small decisions in business, just small business decisions.” 

For that reason we know that sometimes it is important for you to be provided a wide swath of information that may not be highly detailed.  If there is a fire in your building…you just need to know where it is, not necessarily how hot it is burning.  With that in mind, we thought we would touch on a few hot currency updates that you may need to know.

Will the U.S. Dollar Sink or Swim?

The Greenback appears to be treading water right now waiting to see what action the Fed signals it is considering in the near future.  The Dollar has steadied since hitting six-months lows last week and it appears that we can expect the USD to not demonstrate any abrupt movements (up or down) until or unless (a) the Fed’s meeting minutes incite more trepidation and (b) the current Administration is pulled into more controversy.

Don’t get Moody about China…

Global markets seemed to shrug off a move by Moody’s Investors Service to downgrade China’s sovereign credit rating by a notch.  China’s response was measured and low-key to the Moody’s bearish move on their ratings. Many currency traders slowed their interest in the Yuan until the global markets get a firmer grip on what this Moody move will actually mean in the short term.

Euro Cashes Out Over the Last Few Days

It appears that the Euro has eased below its six month highs against the Greenback due to traders pulling profits in anticipation of the minutes being released from the last Fed meeting.  Now that France will evidently be solidly behind a European single currency for the foreseeable future, it is expected that the Euro will continue to trend in a positive direction.  At this point the Euro seems to be on stable footing.

Stirring the Sterling!

The Sterling seemed to stabilize a bit as the major currencies waited to find out what the Fed’s notes foretold from their meeting earlier in May.  However, the Pound ran into some headwinds since sailing to some eight month peaks over the past week.  Internal polls in the UK also show that frontrunner Theresa May’s lead is shrinking ahead of Britain’s general election on June 8th.  The long term is expected to remain favorable for buyers of the pound with the Sterling still far below the pre-Brexit referendum levels of around 1.47….yet far above the 31-year lows of 1.15 of last October.

Loonie for the Loonie?

The Loonie has charged back nearly 2.5% from a 14-month cratered low touched in early May of near 1.38.  This is due to both a “lift” effect from the weakening Greenback and due to bullish oil prices of late.  This week OPEC is expected to extend their production cuts which will only help to bolster shale oil prices and Canadian deep well oil prices as well.   This effect can only help to continue the Loonie’s rebound.

The Bottom Line…

MosaicaFX expects the Dollar to remain fairly constant at least until the next Fed meeting on June 14th when a decision will be made on whether to raise interest rates (unless of course more political intrigue occurs).  The Fed Chair has expressed some optimism in the current U.S. economic state of affairs and conventional wisdom portends that the most unsettling news to affect the Greenback is based on political and not economic or financial issues.

Therefore, we would strongly advise that you partner with a currency management company that will provide ongoing and accurate overviews on the volatile currency markets.  It is only through experienced input will you be able to protect your profits and develop sound currency strategies moving forward.

Make an appointment with one of our Executive Account Managers today so we can explain our latest hedging and option strategies to you.  We are accepting a limited number of new clients at this time and would like to explore this opportunity with you.

Business, Economy

The Greenback “Yo-Yo” Surges Upwards!

The Greenback “Yo-Yo” Surges Upwards!

At MosaicaFX, we pride ourselves on providing you the most up-to-date information we can when it comes to currency exchange rates and business management recommendations.

As we have mentioned in previous articles, there are literally hundreds of data portals that must be reviewed each week so we can stay abreast of the hourly fluctuations today’s markets must contend with.

Having said that, even our experienced Staff and Executive Account Managers have been amazed at the “yo-yo,” like actions that the political gyrations in the nation’s capital have had on the Greenback over the last week or two.  It appears that despite the latest actual currency trades taking place in the markets…it is the psychological affect regarding the new U.S. administration that is driving the dollar valuation.

Onward and UPWARD!

Multiple traders said that the latest trigger for the move higher in the dollar, as well as the Dow Jones Industrial average was the reemergence of former FBI Director James Comey saying President Trump never asked him to end any probe, as reported on CNBC.

As a result of this latest breaking news the Greenback suddenly surged against the British Pound and other currencies Thursday.  The month old CSPAN video was interpreted as former FBI Director Comey saying he was never pressured to end an FBI probe of former National Security Advisor Flynn.

While the video seemed to reflect Comey answering a question specific to the U.S. Attorney General and/or “Senior Officials at the Department of Justice,” and not necessarily President Donald Trump… it nevertheless was seen as on obvious opportunity for Comey to assert that “someone else” may have done so.  His failure to do so has been seen as positive support for Trump.

Again, the main take away is that if the question asked was, “….did anyone every pressure you to end any probe?”  An answer of “no,” speaks volumes in general terms.  Thus, it should be obvious that Comey’s statement taken at face value should indicate that no earth-shattering admission is in the wings regarding this issue and how it reflects upon the President.

The Bottom Line…

Multiple traders said this latest development was definitely the motivation for the U.S. dollar to surge upward.  Whether such developments will continue in the days to follow is pure speculation.

It is for this reason that again, MosaicaFX believes that it is more important than ever for currency traders or international businesses to partner with currency management companies they can trust.

If you are not able to process the immense amounts of financial data being published in this day and age, then it is imperative that you find someone who can.  Reach out to one of our Executive Account Managers and let’s discuss your needs and how we may be able to support them.