Trip to Europe
By Laetitia Vaval | October 10, 2007
I’ve just come back from a two-week trip to Europe. Needless to say that I sure felt the weakness of the dollar. I usually love to shop when I am in Paris but this time around everything was so expensive that it took away much of the fun.
I also visited London for the first time, and despite having heard many times that London was one of the most expensive cities in the world, I still couldn’t believe how high the cost of living was. It seemed as if everything cost exactly TWICE as much over there than it does in New York. For example, a 1-week subway pass is about 22 pounds over there (which is about US $45 !! — twice as much as what it costs here). A simple subway ride is 4 pounds — US $ 8 !!! Food, clothing, transportation seemed to keep the same numerical value as in the U.S. ( 32 for a basic T-Shirt, 12 for a pizza, etc) except that instead of being expressing in dollars prices were in Pounds (i.e. more than doubled).
Even duty-free over there wasn’t all that worth it given the exchange rate…
It was really interesting going there at this time, right after my stay at FXCM. I never had really paid much attention to exchange rates in the past, but my trip was a first-hand demonstration of the current situation with the US Dollar.
Tags: currency market, dollar, fxcm, laetitia vaval, wall street warrior, wall street warriors
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Forex - Risk of Bank of England Rate Cut?
By DailyFX Updates | October 3, 2007
Like the European Central Bank, the Bank of England is expected to leave interest rates unchanged. Typically they do not release a statement when rates are not altered, but last month they took the unusual step of doing so. Aside from that time, a statement was only released on two other occasions since the BoE became independent 10 years ago. This was in 1999 and 1998 and on both occasions, interest rates were cut the following month. Therefore even though no one is talking about it, there is a strong chance that the BoE could surprise with an interest rate cut. Even if they don’t, they may release another statement because not doing so would risk sending a hawkish message to the market. As recently as yesterday, the BoE has taken measures to increase its flexibility in the transactions that it conducts with commercial banks which is a signal that credit conditions remains a concern for the central bank.
Tags: currency market, interest rates, rate cut
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Forex Reversal in Store for Swiss Franc?
By DailyFX Updates | October 1, 2007
We just published our COT Report on DailyFX.com
Although EUR/USD positioning is not at any extreme levels, Swiss position is.
According to David Rodriguez:
CHF: Speculative positioning has reached extreme overbought levels on the Swiss Franc (oversold on the USDCHF), suggesting that a turn may occur in the coming weeks of trade. Though we are reminded that positioning can remain extreme for extended periods of time, it remains relatively clear that the CHF has less scope for a continued medium term rally. Similarly overextended Commercial Net Longs support this view, with the COT Difference coefficient (line in green) at its highest since mid-2006. At this point the USDCHF based near 1.1900 on its way to 1.2800.
Tags: currency market, dailyfx, forex release
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Afternoon Trade
By Laetitia Vaval | September 21, 2007
I entered a short-term position (probably until tomorrow) position in CHF/JPY earlier today. I had noticed that it was trading in a range between 98.56 and 98.20. I got short “relatively” close to the top of the range at 98.483 (middle black line), placed my protective stop at 99.350 ( a previous support level — on the 1 yr chart. Since i’ll be holding this trade overnight i’m going to set a limit price at 98.00 (lower green horizontal line on the chart above). From the different colored lines you can easily see that my risk vs. reward ratio is not optimal in this trade. It seems to be about 2:1 (when it should be 1:2)…
Tags: currency market, forex, forextrading, jpy, wall street warrior, wall street warriors
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