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

0:00:03.960 --> 0:00:08.559
<v Speaker 1>Broadcasting live to New York, Bloomberg to Washington, d C,

0:00:08.800 --> 0:00:14.320
<v Speaker 1>Bloomberg to Boston, Blueberg, Well Under, to San Francisco, Bloomberg nine,

0:00:14.880 --> 0:00:19.120
<v Speaker 1>to the country, Damn General one, and around the globe

0:00:19.239 --> 0:00:22.919
<v Speaker 1>the Bluemberg Radio plucks Apen Bloomberg Dot gone. This is

0:00:23.000 --> 0:00:25.880
<v Speaker 1>taking stock. Coming up on taking stock, We're going to

0:00:25.960 --> 0:00:30.320
<v Speaker 1>take stock of currencies and the US dollar with rates

0:00:30.360 --> 0:00:34.040
<v Speaker 1>as low, well the ten year US Treasury at one

0:00:34.080 --> 0:00:37.640
<v Speaker 1>point five five would a rate increase even if twenty

0:00:37.680 --> 0:00:40.760
<v Speaker 1>five basis points? Would that change the value of the

0:00:40.840 --> 0:00:45.200
<v Speaker 1>US dollar versus our major trading partners. Will find out

0:00:45.280 --> 0:00:47.680
<v Speaker 1>more coming up, but right now, let's find out about

0:00:47.760 --> 0:00:50.360
<v Speaker 1>news from Charlie Pellett in the Bloomberg news room. All right,

0:00:50.360 --> 0:00:53.280
<v Speaker 1>thank you very much. Pim Fox stocks extending their decline

0:00:53.400 --> 0:00:57.480
<v Speaker 1>led by drugmakers. The SMP five hundred indexes down four

0:00:57.520 --> 0:01:01.160
<v Speaker 1>tenths of one percent. Investors are also waiting Friday speech

0:01:01.240 --> 0:01:04.360
<v Speaker 1>from fed share Janet Yellen. They'll be listening for clues

0:01:04.400 --> 0:01:08.080
<v Speaker 1>on when to expect higher borrowing costs. And Brett Bryan

0:01:08.240 --> 0:01:10.960
<v Speaker 1>is U S economist at Deutsche Bank Securities. He was

0:01:11.000 --> 0:01:14.080
<v Speaker 1>interviewed about a fed share Janet Yellen this morning and

0:01:14.160 --> 0:01:16.800
<v Speaker 1>the interest rate outlook on Bloomberg Television. We're seeing a

0:01:16.880 --> 0:01:21.640
<v Speaker 1>very coordinated effort amongst the Fed speakers to buy that

0:01:21.720 --> 0:01:25.959
<v Speaker 1>optionality for September for the for the Committee. So the

0:01:25.959 --> 0:01:28.600
<v Speaker 1>Fed would love to just you know, whether they're learning

0:01:28.640 --> 0:01:30.920
<v Speaker 1>a hurry or not, they want to have that September

0:01:30.959 --> 0:01:34.200
<v Speaker 1>option available. Well, not even the US Congressional Budget Office

0:01:34.240 --> 0:01:37.399
<v Speaker 1>is buying the federal reserves projected path for interest rates

0:01:37.440 --> 0:01:41.320
<v Speaker 1>in coming years, starting with some Central bankers insistence that

0:01:41.440 --> 0:01:44.679
<v Speaker 1>a hike next month is possible. In the latest update

0:01:44.800 --> 0:01:48.080
<v Speaker 1>of its Budget and Economic Outlook, the CBO says that

0:01:48.200 --> 0:01:50.480
<v Speaker 1>expects the Central Bank to hold its target for the

0:01:50.520 --> 0:01:53.520
<v Speaker 1>federal funds rate at point to five to point five

0:01:53.600 --> 0:01:57.640
<v Speaker 1>percent until the fourth quarter of this year before raising it.

0:01:57.960 --> 0:01:59.960
<v Speaker 1>The tenure down one thirty second, with the yield of

0:02:00.080 --> 0:02:04.040
<v Speaker 1>one point five five percent, Gold tumbling eighteen forty the

0:02:04.040 --> 0:02:07.200
<v Speaker 1>ounce three that's the drop right now of one point

0:02:07.240 --> 0:02:11.160
<v Speaker 1>four percent. Crude oil West Texas Intermediate down two point

0:02:11.200 --> 0:02:15.520
<v Speaker 1>eight percent, tumbling dollar thirty six to forty six dollars

0:02:15.600 --> 0:02:19.399
<v Speaker 1>and seventy three cents. New numbers from the National Association

0:02:19.400 --> 0:02:22.799
<v Speaker 1>of Realtors show Sales of previously owned homes dropped more

0:02:22.840 --> 0:02:26.280
<v Speaker 1>than forecast in July from a nine year high, restrained

0:02:26.320 --> 0:02:30.800
<v Speaker 1>by limited choices for buyers. SMP five hundred index down

0:02:30.880 --> 0:02:33.600
<v Speaker 1>eight to seventy eight, a drop of four tenths of

0:02:33.639 --> 0:02:36.280
<v Speaker 1>one percent. The down down three tenths of one percent,

0:02:36.360 --> 0:02:40.960
<v Speaker 1>lower by fifty two points to thirty two on Wall Street. Now,

0:02:41.000 --> 0:02:42.880
<v Speaker 1>let's take a look at some of the other stories

0:02:42.919 --> 0:02:46.960
<v Speaker 1>making news. Thank you Charlie from the Bloomberg newsroom. I'm

0:02:47.040 --> 0:02:50.120
<v Speaker 1>Jill Schneider. This news update is brought to you by Audie.

0:02:50.320 --> 0:02:52.639
<v Speaker 1>Like a force of nature, the Summer of Out event

0:02:52.720 --> 0:02:55.720
<v Speaker 1>has arrived. Visit your try State Audie Dealer during the

0:02:55.760 --> 0:02:58.000
<v Speaker 1>Summer of Audie Event and get up to a five

0:02:58.080 --> 0:03:02.360
<v Speaker 1>thousand dollar bonus on select out vehicles. Rescue crews continue

0:03:02.400 --> 0:03:04.880
<v Speaker 1>to dig through the rubble in central Italy looking for

0:03:04.960 --> 0:03:08.440
<v Speaker 1>survivors after an earthquake that struck when many people were sleeping.

0:03:08.720 --> 0:03:12.320
<v Speaker 1>At least one twenty people have been confirmed dead. Bloomberg's

0:03:12.320 --> 0:03:15.560
<v Speaker 1>Alessandra Nigliatio is in the small town of Amateurs. They

0:03:15.560 --> 0:03:18.360
<v Speaker 1>are definitely after shops. Not as strong as the first,

0:03:18.400 --> 0:03:21.320
<v Speaker 1>but the unnerving when you're in a Hailltown with the

0:03:21.720 --> 0:03:24.519
<v Speaker 1>ground full of crack. Italian officials say they have set

0:03:24.560 --> 0:03:27.280
<v Speaker 1>up tense cities to care for the thousands left homeless

0:03:27.280 --> 0:03:30.440
<v Speaker 1>by the quake. Vice President Joe Biden is in Turkey

0:03:30.480 --> 0:03:33.960
<v Speaker 1>trying to patch up shaky relations with a Key NATO ally.

0:03:34.080 --> 0:03:37.400
<v Speaker 1>Biden condemned last month's failed coup after meeting with Turkish

0:03:37.400 --> 0:03:40.320
<v Speaker 1>President Urdwan. The people of the United States of America

0:03:41.080 --> 0:03:48.800
<v Speaker 1>a poor what happened and under no circumstances with support

0:03:49.760 --> 0:03:55.280
<v Speaker 1>and a remotely approaching the cowardly act of the treasonous

0:03:56.000 --> 0:03:59.280
<v Speaker 1>members of your military. Turkey has demanded that the US

0:03:59.400 --> 0:04:03.040
<v Speaker 1>extradite Fatula guland the Islamic cleric it blames for the

0:04:03.040 --> 0:04:06.880
<v Speaker 1>coup attempt. This week marks the two anniversary of the

0:04:06.920 --> 0:04:09.720
<v Speaker 1>Battle of Brooklyn, when fierce fighting between the British and

0:04:09.840 --> 0:04:13.520
<v Speaker 1>Continental armies broke out, engulfing an area that encompassed what

0:04:13.640 --> 0:04:16.800
<v Speaker 1>is today Park Slope, Prospect Heights, and a section along

0:04:16.839 --> 0:04:21.040
<v Speaker 1>the Gojanas Canal. About three thousand Americans died. Global News

0:04:21.080 --> 0:04:24.560
<v Speaker 1>twenty four hours a day, powered by more than journalists

0:04:24.600 --> 0:04:27.720
<v Speaker 1>and analysts in more than one twenty countries. I'm Jill

0:04:27.760 --> 0:04:31.200
<v Speaker 1>Schneider and this is Bloomberg, Charlie, and we thank you,

0:04:31.279 --> 0:04:33.880
<v Speaker 1>and again recapping stocks LA R S and P five

0:04:33.960 --> 0:04:38.479
<v Speaker 1>hundred index dropping eight points now to one, a drop

0:04:38.560 --> 0:04:41.880
<v Speaker 1>there of four tenths of one percent. I'm Charlie Tallaton.

0:04:42.000 --> 0:04:47.160
<v Speaker 1>That's sub Bloomberg Business Flash. This is taking stock the

0:04:47.200 --> 0:04:52.960
<v Speaker 1>FED in focus on Bloomberg Radio. And here to focus

0:04:52.960 --> 0:04:55.080
<v Speaker 1>on the FED with us is Stephen Casey for an

0:04:55.080 --> 0:04:59.279
<v Speaker 1>exchange trader and senior market analyst at Cambridge Global Payments.

0:04:59.520 --> 0:05:02.440
<v Speaker 1>Joining us the New York studio. Stephen, we have you know,

0:05:02.720 --> 0:05:06.160
<v Speaker 1>um yell in coming up, we have Jackson Hole for

0:05:06.279 --> 0:05:09.839
<v Speaker 1>our currencies perspective. What is number one on your mind

0:05:09.960 --> 0:05:12.440
<v Speaker 1>going into the next couple of weeks here, Um, from

0:05:12.440 --> 0:05:15.760
<v Speaker 1>a currency perspective, probably a little clarity. I think the

0:05:15.800 --> 0:05:17.800
<v Speaker 1>Fed has given the dollar a little bit of a

0:05:17.839 --> 0:05:20.560
<v Speaker 1>crisis of confidence over the last few weeks, especially over

0:05:20.600 --> 0:05:22.679
<v Speaker 1>the last seven days. When the FED minutes were released

0:05:22.720 --> 0:05:26.000
<v Speaker 1>a week ago, UM, the dollar I personally didn't think

0:05:26.000 --> 0:05:29.599
<v Speaker 1>it should deserve the slide that it received, but it

0:05:29.640 --> 0:05:31.440
<v Speaker 1>was sold across the board. It's been very weak over

0:05:31.480 --> 0:05:33.400
<v Speaker 1>the last week, and we've had a little bit of

0:05:33.400 --> 0:05:35.960
<v Speaker 1>profit taking recently. But UM, I think we need to

0:05:36.000 --> 0:05:39.320
<v Speaker 1>see some clarity from the Fed, some um, some consistency

0:05:39.360 --> 0:05:41.960
<v Speaker 1>with what with what, what's going to be coming up next?

0:05:42.080 --> 0:05:44.320
<v Speaker 1>Do you think we will see that clarity? I think

0:05:44.360 --> 0:05:47.839
<v Speaker 1>the the driving factor here UM that we talked about

0:05:48.000 --> 0:05:50.719
<v Speaker 1>a little bit earlier with Joe Wisenthal of of Bloomberg

0:05:50.720 --> 0:05:55.359
<v Speaker 1>Markets is debate seems to be UM the overlying status

0:05:55.480 --> 0:05:58.080
<v Speaker 1>quo for what's going on with the Fed, and a

0:05:58.200 --> 0:06:01.800
<v Speaker 1>lack of decisiveness. Do you think we'll see I'm optimistic

0:06:01.800 --> 0:06:04.240
<v Speaker 1>we'll see that. I think UM. The comments over the

0:06:04.240 --> 0:06:07.000
<v Speaker 1>weekend from by Chairman Stanley Fisher were a good indicator

0:06:07.040 --> 0:06:09.080
<v Speaker 1>of what we might see from Chairman Yellen on Friday.

0:06:09.400 --> 0:06:11.920
<v Speaker 1>I think she's gonna do her best to keep September live.

0:06:11.960 --> 0:06:13.920
<v Speaker 1>I personally don't think there's any chance they're gonna hike

0:06:13.960 --> 0:06:16.479
<v Speaker 1>before the election. I think it's a fifty fifty shot.

0:06:16.520 --> 0:06:18.600
<v Speaker 1>At the December meeting. I think she's gonna want to

0:06:18.600 --> 0:06:20.200
<v Speaker 1>be a little bit more optimistic, and I think she's

0:06:20.200 --> 0:06:22.520
<v Speaker 1>gonna try to write the ship for the dollar. It's

0:06:22.520 --> 0:06:24.080
<v Speaker 1>sold off quite a bit over the last six weeks

0:06:24.120 --> 0:06:26.200
<v Speaker 1>or so, so it's got some room to recover. UM

0:06:26.240 --> 0:06:28.560
<v Speaker 1>and I'm optimistic that her comments will kind of kick

0:06:28.600 --> 0:06:31.520
<v Speaker 1>it off. Stephen Casey, is it possible we could go

0:06:31.560 --> 0:06:34.400
<v Speaker 1>through some of the currency pairs. For example, the dollar

0:06:34.520 --> 0:06:37.839
<v Speaker 1>euro right now trading at one twelve sixties six. Do

0:06:37.880 --> 0:06:40.760
<v Speaker 1>you expect the euro to strengthen or weaken against the dollar?

0:06:41.440 --> 0:06:43.800
<v Speaker 1>I expect the euro to the euro rate to kind

0:06:43.800 --> 0:06:46.360
<v Speaker 1>of tumble over UM. It's fallen off about a little

0:06:46.400 --> 0:06:48.120
<v Speaker 1>less than one percent over the last twenty four hours.

0:06:48.160 --> 0:06:51.320
<v Speaker 1>I think if we do see some optimism from Janet Yellen,

0:06:51.360 --> 0:06:54.000
<v Speaker 1>I think it could continue to gravitate back towards that

0:06:54.040 --> 0:06:56.960
<v Speaker 1>one ten area. I think the fundamental picture as we

0:06:57.320 --> 0:07:00.120
<v Speaker 1>get deeper into Q three points for a euro a

0:07:00.120 --> 0:07:02.240
<v Speaker 1>lower year at all the rate UM. And I think

0:07:02.279 --> 0:07:04.280
<v Speaker 1>if we do see some of those similar comments from

0:07:04.360 --> 0:07:06.800
<v Speaker 1>Yelling that we saw from Fisher, that should really get

0:07:06.800 --> 0:07:09.400
<v Speaker 1>the engine going. All right. How about the pounds sterling

0:07:09.400 --> 0:07:12.840
<v Speaker 1>at one four? I think it's a similar story. The

0:07:12.840 --> 0:07:14.480
<v Speaker 1>pound is kind of twisting in the wind right now.

0:07:14.480 --> 0:07:17.280
<v Speaker 1>Whenever you see a twelve cent drop in just over

0:07:18.000 --> 0:07:20.000
<v Speaker 1>one day, it's kind of in no man's lands, and

0:07:20.040 --> 0:07:22.040
<v Speaker 1>it's been kind of hanging around there for the last month.

0:07:22.400 --> 0:07:25.520
<v Speaker 1>UM Fundamentally, I still favor UM Sterling dropping back below

0:07:25.560 --> 0:07:28.320
<v Speaker 1>that one thirty area. I think, UM, as we see

0:07:28.360 --> 0:07:30.680
<v Speaker 1>a little bit more optimism from the Fed, a little

0:07:30.720 --> 0:07:33.360
<v Speaker 1>bit more confidence with what they want to do towards

0:07:33.360 --> 0:07:35.480
<v Speaker 1>the end of the year, that should favor Sterling tipping

0:07:35.480 --> 0:07:41.080
<v Speaker 1>below one and the Canadian dollar one right now. Yeah,

0:07:41.080 --> 0:07:43.200
<v Speaker 1>that's been kind of a pain as well. UM, it's

0:07:43.240 --> 0:07:47.120
<v Speaker 1>been been a kind of a rocky summer. Well, it's tough, right.

0:07:50.320 --> 0:07:52.200
<v Speaker 1>I took my vacation in June. I wish I pushed

0:07:52.200 --> 0:07:55.440
<v Speaker 1>it off to August. It's been so quiet. Equities, folks,

0:07:55.480 --> 0:08:00.000
<v Speaker 1>we are each crew right. Well, Unfortunately, I'm gonna take

0:08:00.000 --> 0:08:01.640
<v Speaker 1>the same stance with dollar Cat. I know we've been

0:08:01.640 --> 0:08:04.080
<v Speaker 1>trading just below that one thirty area UM for the

0:08:04.160 --> 0:08:07.280
<v Speaker 1>last few weeks. But I think fundamentally, UM, if you

0:08:07.280 --> 0:08:10.200
<v Speaker 1>want to look at Canada, UM, I think dollar cats

0:08:10.200 --> 0:08:12.880
<v Speaker 1>should favor back towards that one thirty five range as

0:08:12.920 --> 0:08:17.760
<v Speaker 1>we move into UH September October, it's twofold. One. I

0:08:17.800 --> 0:08:19.640
<v Speaker 1>think we're going to see a little bit more optimism

0:08:19.680 --> 0:08:21.400
<v Speaker 1>from the Fed, and two, I think we're kind of

0:08:21.400 --> 0:08:25.360
<v Speaker 1>seeing the the the new progressive policies, UM. Up in

0:08:25.400 --> 0:08:27.640
<v Speaker 1>Canada taking fold. Just last month they were reported one

0:08:27.680 --> 0:08:30.800
<v Speaker 1>of their largest deficits um ever, so I think that's

0:08:30.800 --> 0:08:32.920
<v Speaker 1>going to continue to filter into the market. Yeah, the

0:08:33.000 --> 0:08:36.600
<v Speaker 1>government of Justin Trudeau, he's gonna be spending money stimulate

0:08:36.679 --> 0:08:42.199
<v Speaker 1>the economy. Japanese yen at one hundred dot four four,

0:08:42.320 --> 0:08:46.040
<v Speaker 1>So one hundred. Where is that a key level? One hundred?

0:08:46.080 --> 0:08:50.880
<v Speaker 1>I mean number, it's a pretty number. Well, if you

0:08:50.880 --> 0:08:52.679
<v Speaker 1>think the Fed's got issues, take a look at the

0:08:52.679 --> 0:08:55.040
<v Speaker 1>bank in Japan because it's absolutely a month lungingmatch right

0:08:55.040 --> 0:08:57.080
<v Speaker 1>now between them and the government. UM. I think they're

0:08:57.080 --> 0:08:59.319
<v Speaker 1>going to be meeting the third week of September there

0:08:59.400 --> 0:09:02.480
<v Speaker 1>right now kind of doing a report or an assessment

0:09:02.880 --> 0:09:06.720
<v Speaker 1>um as to what they've seen from a UH policy

0:09:06.760 --> 0:09:08.600
<v Speaker 1>standpoint over the last few months. So we'll get more

0:09:08.600 --> 0:09:11.360
<v Speaker 1>clarity mid in mid September. UM. I don't think we're

0:09:11.360 --> 0:09:13.520
<v Speaker 1>gonna stray too far from from this one, Mark. I

0:09:13.559 --> 0:09:16.000
<v Speaker 1>think we could again bounce a little bit if we

0:09:16.160 --> 0:09:17.840
<v Speaker 1>UM we get what I think is going to happen

0:09:17.840 --> 0:09:21.160
<v Speaker 1>on Friday with Jackson Hall and just tell us about

0:09:21.240 --> 0:09:24.400
<v Speaker 1>d x Y. This is the index that is used

0:09:24.440 --> 0:09:28.240
<v Speaker 1>to track the value of the US dollar versus major

0:09:28.280 --> 0:09:32.200
<v Speaker 1>trading partners. How does that actually get put together? And

0:09:32.440 --> 0:09:35.600
<v Speaker 1>what is it telling you? Well, it's a reading of

0:09:35.600 --> 0:09:39.959
<v Speaker 1>the sixteen most traded currencies versus the US dollar. UM

0:09:40.000 --> 0:09:41.920
<v Speaker 1>in our in our space. Whether or not it's going

0:09:42.000 --> 0:09:44.080
<v Speaker 1>to be too impactful kind of ebbs and flows At

0:09:44.120 --> 0:09:46.400
<v Speaker 1>the moment um, I think it's been kind of leading

0:09:46.400 --> 0:09:49.240
<v Speaker 1>the charge. But um, it's not something that I try

0:09:49.280 --> 0:09:51.400
<v Speaker 1>to keep track of. When we're approaching events such as this.

0:09:51.760 --> 0:09:53.640
<v Speaker 1>It's best to keep an eye on the fundamentals rather

0:09:53.679 --> 0:09:57.720
<v Speaker 1>than technicals. Fundamentals rather than technicals are right, good? Then

0:09:57.760 --> 0:09:59.920
<v Speaker 1>I don't have to learn too much about d x Y,

0:10:00.000 --> 0:10:04.000
<v Speaker 1>although we do track that of course. Um, what about

0:10:04.000 --> 0:10:07.559
<v Speaker 1>emerging market uh currencies? I keep thinking about the Brazilian

0:10:07.600 --> 0:10:09.880
<v Speaker 1>real for example. The stock market there is up with

0:10:09.960 --> 0:10:13.120
<v Speaker 1>thirty percent year to date. Yeah, I mean it's always

0:10:13.160 --> 0:10:15.160
<v Speaker 1>been one of the few areas, especially in these markets,

0:10:15.160 --> 0:10:18.839
<v Speaker 1>where you could chase yield. Unfortunately, there have some piccadillo.

0:10:18.920 --> 0:10:21.000
<v Speaker 1>So if you do rush into those emerging markets currencies,

0:10:21.040 --> 0:10:23.520
<v Speaker 1>you're gonna have to worry about, um, some things kind

0:10:23.520 --> 0:10:26.400
<v Speaker 1>of flying up out of out of nowhere. So um,

0:10:26.480 --> 0:10:28.040
<v Speaker 1>you know in these markets where you've got, you know,

0:10:28.160 --> 0:10:30.520
<v Speaker 1>zero interest rate or negative industrates. With Japan in the

0:10:30.640 --> 0:10:33.280
<v Speaker 1>US and UM in Europe and Canada, you could see

0:10:33.320 --> 0:10:35.800
<v Speaker 1>investors flushing into those im markets, but it's always a

0:10:35.840 --> 0:10:38.920
<v Speaker 1>dicey fly. Stephen Casey, thank you for joining us and

0:10:39.160 --> 0:10:44.000
<v Speaker 1>giving us the rundown on those currency markets. Foreign exchange

0:10:44.040 --> 0:10:47.720
<v Speaker 1>trader and senior market analyst at Cambridge Global Payments joining

0:10:47.800 --> 0:10:51.120
<v Speaker 1>us here UM at Bloomberg Radio. I'm Alex Brenka and

0:10:51.120 --> 0:10:55.240
<v Speaker 1>for Kathleene Hayes, and this is him. Yes, this is

0:10:55.280 --> 0:11:01.640
<v Speaker 1>taking Stock and this is Bloomberg. The FED in Focus

0:11:01.679 --> 0:11:03.880
<v Speaker 1>is brought to you by Willoughby's since eighteen ninety eight,

0:11:03.920 --> 0:11:06.280
<v Speaker 1>New York City's boutique camera store for precision craft at

0:11:06.320 --> 0:11:09.000
<v Speaker 1>Hazelblad and Like A Cameras, plus a full selection of

0:11:09.000 --> 0:11:12.520
<v Speaker 1>GoPro action adventure cameras. Willoughby's corner of Fifth Avenue and

0:11:12.600 --> 0:11:13.440
<v Speaker 1>thirty first Street