Quiet Start to the Week!
By Mike Conlon | February 8, 2010
This week is starting out kind of quiet, perhaps recovering from Super Bowl hangovers and the carnage from the end of last week. There’s no real earth-shattering news on tap until the end of the week, when all eyes will be on Europe. This is exactly what the markets need; a chance to rest and re-evaluate. I’m seeing some mild risk-taking and US dollar weakness this morning.
On to the currencies:
Aussie (AUD): No real news on tap until the end of the week when Australia reports its employment figures. Look for the Aussie to trade solely on risk themes and commodity prices this week. The Aussie is up across the board.
Kiwi (NZD): Expect the Kiwi to trade in similar fashion to the Aussie. New Zealand’s economy is still “fragile”, according Reserve Bank Governor Bollard in response to last week’s unemployment figures. There will be some figures coming out later this week that may help gauge inflation, but don’t expect any major moves outside of risk themes.
Loonie (CAD): Canadian housing starts came in better than expected this morning, but expect the Loonie to trade more on US themes and commodity (particularly oil prices) this week. No other news this week.
Euro (EUR): By now if you’re not aware of the pending debt crisis in Greece, then you’ve had your head in the sand for some time! Seriously, reports coming out of Greece suggest labor strikes as unions are dead-set against the government’s debt reduction plans. In the past, these strikes have become violent which could further highlight the problems and decrease confidence. On tap this week is Germany’s Consumer Price Index and at the end of the week we get Euro zone GDP figures. The trends on the chart clearly look down and we could see the Euro test 1.35 vs. USD. Stay tuned!
Pound (GBP): The Pound is down again after surveys showed the opposition party’s lead over the incumbent party narrowing, which would result in an election to be held in June. Furthermore, British GDP and the BOE quarterly inflation report are on tap, which could show weaker than expected growth. The pound is just under 1.56 vs. USD.
Dollar (USD): The Dollar is weak this morning, paring back after gains last week from risk-aversion themes. Toward the end of the week retail sales will be reported which should be a gauge of how recovery is going. The consumer in the US represents some 70% of GDP so weaker sales could foreshadow slower growth. Friday is the UM Consumer confidence number.
Yen (JPY): The yen is weak today mainly on risk-taking and a pullback from strength last week. Economic slowdowns are predicted as problems in the Euro zone hurt exports and the Toyota recalls hurting the economy in general.
After last week’s scare, expect the market to trade some sideways as market capitulation digests the news. Barring any major economic “disasters”, expect traders to dip their toes back into the risk trade very slowly. However, if stocks continue to sell of today, then we could be in for more dollar strength.
Overnight, Asian markets are down while they are trading higher in Europe. US market futures are down, and oil is up slightly to 71.25, with a better rebound in gold, up 1.25% to 1065.
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Currency Markets Return to “Normal”!
By Mike Conlon | November 30, 2009
In the wake of the Dubai debt crisis from last week, the currency markets are attempting to return to normal, whatever that is. While the risk to overall markets have been heightened, there doesn’t seem to be a dominant theme either way. It appears as though we are taking a “breather”– that is a pause before the market decides what it wants to do.
Aside from the usual risk taking/ risk aversion trades, there are 2 important pieces of news to be aware of:
1. Canadian dollar (CAD) strength- Canada reported 3rd quarter GDP growth, indicating that they are exiting their recession.
2. British pound (GBP) weakness- British consumer confidence weakened and the BOE has left the door open for further quantitative easing if their economy doesn’t pick up.
So I’m keeping my “eye on Dubai’ (yes I’m a poet and know it!) and looking to see if there is any fall-out or contagion from it. If the situation looks contained, then I would expect the risk taking trades to be back on the table as the long-term trends dictate.
However, I wouldn’t be surprised to see if any more “bad” news comes out this week. No one wants to be seen as piling on, but we could see some dollar strength if there are some hidden time-bombs out there. Better to get them out now then let them fester and explode later.
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Tags: BOE, British, cad, canada, course, crisis, currenc, currency, currency market, dollar, Dubai, economy, fx, fxedu, gbp, Il, Mike Conlon, news, pound, recession, RSI, ssi, time, trade, trades, trend
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Want to know the top 4 upward trending currency pairs?
By Sean Hyman | March 10, 2009
When almost all financial assets are going down in almost every market right now, these 4 currency pairs buck the trend. Want to know what they are?
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Sean Hyman
Tags: crisis, currency, currency pairs, depression, dow, forex, forextrading, fxedu, market, money, mywealth, recession, Sean Hyman, strategy, trading, uptrend, wealth
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