The wicked helpful Currency Strategy newsletter from Brown Brothers Harriman landed this morning with a bit I cannot understand:
In the UK, where the BoE left rates unchanged as expected, sterling is being bolstered by upbeat comments from the London Time's Kaletsky. Adjustments in the crosses are also contributing to today's moves. The Japanese yen is steady, pulled by activity in the crosses. The Australian and Canadian dollars are firmer. Weak Australian trade data had little impact.
Anyone get that part about "adjustments in the crosses?" I know it means something -- maybe this? Later today, I'll call the wicked helpful Marc Chandler and ask him. Stay tuned.
UPDATE: Just called Chandler. He was out, but I got his colleague Win Thin, and he said . . .
In this case, the idea of a "cross" means the connection between two forms of money that aren't the U.S. dollar. "It's not dollar-based," Thin said.
So "adjustments in the crosses are contributing to today's moves" means something like, "A couple of foreign currencies wiggled around together, and that affected our wiggling around." In the latest trading, the Japanese yen held its own because its value grew against the euro and pound. Europeans on vacation in Japan might feel the sting.
Get it?
categories: Currencies, What I Didn't Understand Today
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