Currencies Update: Dollar-Euro and Bitcoin Twins

The dollar rebounds after Friday's employment report and the Winklevoss twins launch their Bitcoin exchange.

Alex Dumortier
Alex Dumortier, CFA
Oct 5, 2015 at 4:13PM
Markets

Traders continue to reposition themselves with regard to the dollar in the wake of Friday's employment numbers, which disappointing: Fewer than 150,000 jobs created in September; the revision lower to 136,000 from 173,000 for August makes it two consecutive months that are shy of that mark.

The U.S. dollar index (DJINDICES: DXY) which measures the value of the dollar against a weighted basket of six currencies, was down as much as 0.40% early this morning, but it has recovered and was up 0.27% to 96.082 as of 1:38 p.m. EDT.

The dollar was also up 0.27% against the euro at 1:50 p.m. EDT (this is not pure coincidence and reflects the euro's the dominant weighting in the U.S. dollar index.)

And speaking of the euro, the most successful dollar-euro (CURRENCY:EURUSD) forecasting team in the third quarter according to Bloomberg, Mizuho Bank, is at odds with the consensus. Mizuho estimates "fair value" for the euro at $1.20 against its current level of $1.1180, well above Bloomberg's median year-end forecast of $1.08.

Mizuho's chief markets economist, Daisuke Karakama, told Bloomberg that "[f]or the euro to fall below $1.08, there has to be something that challenges the integration of the common currency" [did he mean 'integrity'?]. We've seen it before, Mr. Karakama! Still, Sunday's election in Portugal, which the incumbent centre-right government took home despite swingeing austerity measures, will have to put some of those fears to rest.

Wonder Twin powers: Activate!
Some crypto-currency news now: Bitcoin proponents Tyler and Cameron Winklevoss announced today that they have obtained a license to operate a limited liability trust company in the state of New York for their "next generation bitcoin exchange," Gemini Trust Company.

Gemini, which begins trading this coming Thursday at 09:30 a.m. EDT, will initially operate in 26 states and the District of Columbia, serving retail and institutional customers.

No word yet on what makes Gemini a "next generation" exchange; it's neither the first exchange to be licensed in the U.S. (Coinbase) or in New York (itBit). On the other hand, I can say with a high degree of confidence that it's the only exchange run by identical twins.