Cambridge Payments' Casey Sees Lower Euro-Dollar Rate (Audio)

five basis points? Would that change the value of the US dollar versus our major trading partners. Will find out more coming up, but right now, let's find out about news from Charlie Pellett in the Bloomberg news room. All right, thank you very much. Pim Fox stocks extending their decline led by drugmakers. The SMP five hundred indexes down four tenths of one percent. Investors are also waiting Friday speech from fed share Janet Yellen. They'll be listening for clues

on when to expect higher borrowing costs. And Brett Bryan is U S economist at Deutsche Bank Securities. He was interviewed about a fed share Janet Yellen this morning and the interest rate outlook on Bloomberg Television. We're seeing a very coordinated effort amongst the Fed speakers to buy that optionality for September for the for the Committee. So the Fed would love to just you know, whether they're learning a hurry or not, they want to have that September

option available. Well, not even the US Congressional Budget Office is buying the federal reserves projected path for interest rates in coming years, starting with some Central bankers insistence that a hike next month is possible. In the latest update of its Budget and Economic Outlook, the CBO says that expects the Central Bank to hold its target for the federal funds rate at point to five to point five percent until the fourth quarter of this year before raising it.

The tenure down one thirty second, with the yield of one point five five percent, Gold tumbling eighteen forty the ounce three that's the drop right now of one point four percent. Crude oil West Texas Intermediate down two point eight percent, tumbling dollar thirty six to forty six dollars and seventy three cents. New numbers from the National Association of Realtors show Sales of previously owned homes dropped more than forecast in July from a nine year high, restrained

by limited choices for buyers. SMP five hundred index down eight to seventy eight, a drop of four tenths of one percent. The down down three tenths of one percent, lower by fifty two points to thirty two on Wall Street. Now, let's take a look at some of the other stories making news. Thank you Charlie from the Bloomberg newsroom. I'm Jill Schneider. This news update is brought to you by Audie. Like a force of nature, the Summer of Out event

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and analysts in more than one twenty countries. I'm Jill Schneider and this is Bloomberg, Charlie, and we thank you, and again recapping stocks LA R S and P five hundred index dropping eight points now to one, a drop there of four tenths of one percent. I'm Charlie Tallaton. That's sub Bloomberg Business Flash. This is taking stock the

FED in focus on Bloomberg Radio. And here to focus on the FED with us is Stephen Casey for an exchange trader and senior market analyst at Cambridge Global Payments. Joining us the New York studio. Stephen, we have you know, um yell in coming up, we have Jackson Hole for our currencies perspective. What is number one on your mind going into the next couple of weeks here, Um, from

a currency perspective, probably a little clarity. I think the Fed has given the dollar a little bit of a crisis of confidence over the last few weeks, especially over the last seven days. When the FED minutes were released a week ago, UM, the dollar I personally didn't think it should deserve the slide that it received, but it was sold across the board. It's been very weak over the last week, and we've had a little bit of

profit taking recently. But UM, I think we need to see some clarity from the Fed, some um, some consistency with what with what, what's going to be coming up next? Do you think we will see that clarity? I think the the driving factor here UM that we talked about a little bit earlier with Joe Wisenthal of of Bloomberg Markets is debate seems to be UM the overlying status quo for what's going on with the Fed, and a lack of decisiveness. Do you think we'll see I'm optimistic

we'll see that. I think UM. The comments over the weekend from by Chairman Stanley Fisher were a good indicator of what we might see from Chairman Yellen on Friday. I think she's gonna do her best to keep September live. I personally don't think there's any chance they're gonna hike before the election. I think it's a fifty fifty shot. At the December meeting. I think she's gonna want to be a little bit more optimistic, and I think she's

gonna try to write the ship for the dollar. It's sold off quite a bit over the last six weeks or so, so it's got some room to recover. UM and I'm optimistic that her comments will kind of kick it off. Stephen Casey, is it possible we could go through some of the currency pairs. For example, the dollar euro right now trading at one twelve sixties six. Do you expect the euro to strengthen or weaken against the dollar? I expect the euro to the euro rate to kind

of tumble over UM. It's fallen off about a little less than one percent over the last twenty four hours. I think if we do see some optimism from Janet Yellen, I think it could continue to gravitate back towards that one ten area. I think the fundamental picture as we get deeper into Q three points for a euro a lower year at all the rate UM. And I think if we do see some of those similar comments from Yelling that we saw from Fisher, that should really get

the engine going. All right. How about the pounds sterling at one four? I think it's a similar story. The pound is kind of twisting in the wind right now. Whenever you see a twelve cent drop in just over one day, it's kind of in no man's lands, and it's been kind of hanging around there for the last month. UM Fundamentally, I still favor UM Sterling dropping back below

that one thirty area. I think, UM, as we see a little bit more optimism from the Fed, a little bit more confidence with what they want to do towards the end of the year, that should favor Sterling tipping below one and the Canadian dollar one right now. Yeah, that's been kind of a pain as well. UM, it's been been a kind of a rocky summer. Well, it's tough, right. I took my vacation in June. I wish I pushed it off to August. It's been so quiet. Equities, folks,

we are each crew right. Well, Unfortunately, I'm gonna take the same stance with dollar Cat. I know we've been trading just below that one thirty area UM for the last few weeks. But I think fundamentally, UM, if you want to look at Canada, UM, I think dollar cats should favor back towards that one thirty five range as we move into UH September October, it's twofold. One. I think we're going to see a little bit more optimism from the Fed, and two, I think we're kind of

seeing the the the new progressive policies, UM. Up in Canada taking fold. Just last month they were reported one of their largest deficits um ever, so I think that's going to continue to filter into the market. Yeah, the government of Justin Trudeau, he's gonna be spending money stimulate the economy. Japanese yen at one hundred dot four four, So one hundred. Where is that a key level? One hundred?

I mean number, it's a pretty number. Well, if you think the Fed's got issues, take a look at the bank in Japan because it's absolutely a month lungingmatch right now between them and the government. UM. I think they're going to be meeting the third week of September there right now kind of doing a report or an assessment um as to what they've seen from a UH policy standpoint over the last few months. So we'll get more clarity mid in mid September. UM. I don't think we're

gonna stray too far from from this one, Mark. I think we could again bounce a little bit if we UM we get what I think is going to happen on Friday with Jackson Hall and just tell us about d x Y. This is the index that is used to track the value of the US dollar versus major trading partners. How does that actually get put together? And what is it telling you? Well, it's a reading of the sixteen most traded currencies versus the US dollar. UM

in our in our space. Whether or not it's going to be too impactful kind of ebbs and flows At the moment um, I think it's been kind of leading the charge. But um, it's not something that I try to keep track of. When we're approaching events such as this. It's best to keep an eye on the fundamentals rather than technicals. Fundamentals rather than technicals are right, good? Then I don't have to learn too much about d x Y, although we do track that of course. Um, what about

emerging market uh currencies? I keep thinking about the Brazilian real for example. The stock market there is up with thirty percent year to date. Yeah, I mean it's always been one of the few areas, especially in these markets, where you could chase yield. Unfortunately, there have some piccadillo. So if you do rush into those emerging markets currencies, you're gonna have to worry about, um, some things kind

of flying up out of out of nowhere. So um, you know in these markets where you've got, you know, zero interest rate or negative industrates. With Japan in the US and UM in Europe and Canada, you could see investors flushing into those im markets, but it's always a dicey fly. Stephen Casey, thank you for joining us and giving us the rundown on those currency markets. Foreign exchange trader and senior market analyst at Cambridge Global Payments joining

us here UM at Bloomberg Radio. I'm Alex Brenka and for Kathleene Hayes, and this is him. Yes, this is taking Stock and this is Bloomberg. The FED in Focus is brought to you by Willoughby's since eighteen ninety eight, New York City's boutique camera store for precision craft at Hazelblad and Like A Cameras, plus a full selection of GoPro action adventure cameras. Willoughby's corner of Fifth Avenue and thirty first Street