Unusually Uncertain!
By Mike Conlon | July 22, 2010
Those were the comments that were made by Fed Chairman Bernanke at yesterday’s testimony to Congress in describing his current view of the economy. This sent the market into a bit of tizzy, causing a sell-off in stocks and creating Dollar strength.
However this morning the markets are riding higher on the back of good US corporate earnings and better than expected European economic data. While stocks have been volatile lately, investors are starting to come around to realize that stocks may be the only chance they have to see gains in their portfolios as bonds are paying next to nothing.
That is investors who are unaware of the forex market. Those of you who have been following this blog know that the currency market offers added protection against downside risk and allows you to diversify into the economic story of other countries.
In Europe, stronger than expected PMI and industrial new orders data have helped the Euro rebound from yesterday’s lows. This all adds up to risk-taking in the market ahead of tomorrow’s release of the results of the European bank stress tests.
In the UK, retail sales figures came in better than expected and US jobless claims are due out at 8:30 AM EST.
In the forex market:
Aussie (AUD): The Aussie is higher on risk-taking despite the fact that business confidence figures declined for the third straight month.
Kiwi (NZD): The Kiwi is higher much like the Aussie but has the added benefits of comments from the finance Minister who stated that he is seeing signs of economic rebalancing. The tradables sector expanded 3.4%, negating declining consumer confidence figures which were down 5.2%.
Loonie (CAD): The Loonie is somewhat mixed today as oil is higher following risk taking themes. However the market is a tad hesitant as concerns over US growth could affect Canada more than the other commodity currencies. This is evidenced by Euro strength vs. the Loonie. BOC Governor Carney is due to speak today and there is some speculation that he may back away from the dovish comments which accompanied the most recent rate hike.
Euro (EUR): The Euro is higher this morning as better than expected industrial orders and PMI data show signs of economic growth. This comes a day in advance of the bank stress tests, which is currently expected to project further Euro strength and not weakness. Something interesting to note is that China has been European debt despite the risks which shows that perhaps they favor the European plan of austerity over the US plan of extend and pretend.
Pound (GBP): The Pound is trading as would be expected on a risk taking day. In addition, household spending figures showed an increase of .7% vs. the expectation of .5%, and retail sales ex auto came in at 1% vs. an expectation of .6%. This may cause the BOE to re-think policy if inflation does not fall back below 3%.
Dollar (USD): The Dollar is the whipping boy today as Bernanke basically told the world that the US economy stinks in no uncertain terms. This morning, jobless claims came in higher than expected at 464K vs. and expectation of 445K. Existing home sales and the house price index are due out later this morning but I don’t expect those figures to be encouraging either.
Yen (JPY): The Yen is mostly lower though trading higher against the Dollar, despite the fact that the rhetoric is starting to pick up from various ministers who are concerned about Yen strength. The Japanese are known to intervene in their currency but at this point the market does not care as the US dollar is clearly the least desirable currency.
Well short of calling Bernanke “Captain Obvious”; no kidding that US economic prospects are “uncertain”. However I don’t know why he thinks it is “unusual”. Let’s face it, Bernanke is more of a history buff than forward-thinker, and perhaps his reliance on his study of the Great Depression has led him astray.
World economies couldn’t be more different today than they were some 70 years ago. To think that because the economy is not behaving like you thought it would based on interpretation of an event that occurred so long ago is borderline stupidity.
Here’s some certainty for ya Ben: encourage this administration to stop the profligate spending! Economies around the globe have decided to cut the fat and take their medicine; it’s a shame that US politicians don’t have the same political backbone.
This is akin to saying that it is unhealthy for a person to lose 50 pounds. While this would be true for a 100 pound woman, it most certainly would NOT be for a woman who weighed twice that amount.
And that is the problem that we have in the US today folks—that when politicians look in the mirror, they can’t recognize that we are obese! It’s like reverse economic anorexia!
It’s time to cut the fat here in the US, starting with our politicians and this administration. Trying to maintain an unhealthy weight is, well unhealthy.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
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Japanese Intervention?
By Mike Conlon | July 20, 2010
This morning, the Japanese yen is lower despite the fact that US corporate earnings are lower this morning, sending stock futures lower. Under a “normal” risk-aversion scenario, we would be seeing Yen strength, however there is some speculation in the marketplace that Japan is getting ready to intervene in its currency as recent Yen strength has been an impediment to exports and thus economic growth.
US corporate earnings are starting to show declining revenues, which is not a positive sign for economic growth. While stock investors may be mesmerized by profit beating estimates, one must consider that profit is being driven by cost-cutting and not expansion. This does not bode well for jobs growth.
The Aussie and Kiwi are higher as Chinese stocks were higher overnight. There is also speculation that China will relax tightening measures.
The Euro is mostly lower to start the US session, as is the Pound. German Producer Prices came in higher than expected, yet the ECB will maintain its asset purchase program as a “security measure”. The results of the bank stress tests are due on Friday.
Lastly, the Canadian rate decision is due out later this morning. The market is expecting a 25 bp hike to .75%, though recent global economic weakness could cause a retreat from a hawkish stance.
In the forex market:
Aussie (AUD): Minutes from the RBA board meeting showed that the Central Bank will wait for the results of the European Bank stress test as well as inflation data to determine whether or not to raise rates at the next meeting. The Aussie is higher this morning despite the risk aversion in the market this morning.
Kiwi (NZD): The Kiwi is higher as Chinese stocks were also higher overnight as there is increased chatter that the Chinese will back off the tightening measures which were intended to slow the rate of growth. If this should occur, then demand for NZ good will increase. However, the commodity currencies are giving back some gains as risk-aversion is apparent to start the US session.
Loonie (CAD): The Loonie is mixed this morning as the BOC rate decision came in with a 25 bp rate hike to .75%, as expected. However it looks like the initial reaction was somewhat negative to the news, as a potential dovish stance going forward may be weighing on investors.
Euro (EUR): The Euro is lower across the board as German PPI figures came in hotter than expected at a .6% monthly increase vs. an expectation of .2%. The results of the bank stress tests are due out on Friday so the market may be jittery despite the positive comments the ECB has been providing. I’m always a skeptic by nature, so put me in the camp that thinks this might not be as rosy as we are being led to believe.
Pound (GBP): Mortgage approvals fell last month as tighter lending standards have discouraged demand as consumer confidence plummeted last month. In addition, CBI business optimism figures came in less than expected as the UK gets ready for announced cut-backs to deal with the ballooning deficit.
Dollar (USD): The Dollar is also mixed today as it is seeing strength vs. all but the Kiwi and Aussie. US housing starts came in less than expected showing a decline of 5% vs. an expected decline of 2.7%. The Dollar is higher against the Yen as speculation of a BOJ intervention is starting to pick up.
Yen (JPY): The Yen is showing some weakness this morning as speculation is that Japanese authorities will attempt to weaken the Yen after it climbed to 7-month highs. A stronger Yen hurts Japanese exports as goods become more expensive. The Japanese have been known to intervene in the past, though they may want to proceed with caution as the market has been driving Yen close to all-time highs.
This morning is a bit of a mixed bad as we see the different pairs trading by region and not necessarily on risk themes.
There is clear weakness today in the Europe, as both the Euro and Pound are lower. The Aussie and Kiwi are higher on higher Chinese stocks and the possibility of weakening policy.
The Dollar is trading somewhat higher, as it is trading inversely to stock markets futures which are lower due to declining corporate revenues.
So at the end of the day, we are definitely in for a global economic slow-down. Results of the European banks stress tests will guide policy around the globe as systemic risk will out-weigh economic conditions in the near-term.
However going forward, some countries may be in better shape to weather any potential economic storms.
So I will continue to remain cautious until Friday and keep my trading short-term.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
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Moderate Growth Ahead!
By Mike Conlon | June 24, 2010
Yesterday’s FOMC meeting came and went as expected, and Bernanke acknowledged that the pace of growth is going to be moderate going forward, backing off from last meeting’s stance that recovery was accelerating. Bernanke cited European debt conditions as being not supportive of growth, and of course he left interest rates unchanged as expected and kept the “extended period” language.
In addition to the FOMC news, US new home sales tanked and were off 33%, confirming the previous day’s data that the housing market is getting worse and not better.
Concerns over Greek debt are heating up as the cost to insure said debt is at an all-time high. Outside of general feelings about the global economy, I’m not certain what has changed in Greece to cause this rise.
What this adds up to is risk-aversion in the market, and Japanese yen and the Swiss Franc are benefiting.
Overnight, New Zealand released GDP that showed growth for a fourth straight quarter and matched analyst expectations. The Kiwi is lower, as the market may have been expecting a bigger number and had pushed the Kiwi too high, too fast.
So there’s no real earth-shattering news in the market today, but rather an overall feeling that economic conditions may be worsening and not getting better.
In the forex market:
Aussie (AUD): The Aussie is lower on risk aversion, but overnight a political coup took place where the Prime Minister Rudd stepped down after losing support of his colleagues. Julia Gillard became Australia’s first female Prime Minister as Rudd lost public opinion largely in part to the proposed mining tax he wanted to impose. Mining is a cash-cow for Australia, and this move was seen as anti-business.
Kiwi (NZD): The Kiwi is lower this morning despite the prospect of another rate hike in July as a result of seeing its fourth straight quarter of growth. The market was hoping the GDP figure would beat analyst expectations, but it “merely” came in as expected at .6%. The Kiwi was the biggest gainer yesterday, so this is a case of market anticipation falling flat. Nevertheless, this is still positive for the Kiwi.
Loonie (CAD): The Loonie is lower this morning as well, taking its cues from oil prices which have “retreated” to $76 and overall risk aversion in the market due to the notion that the pace of global economic recovery may be slowing.
Euro (EUR): Concerns over European debt are heating up as European stocks fall for the third day in a row. Perhaps the market is expecting the US to lead us to recovery, and yesterday’s FOMC statement made it pretty clear that may not be the case. I can’t see anything specific that would lead me to believe that anything today is different than last week. Then again, I don’t have insight into the inner-workings of European banks. The Swiss franc has been seeing massive inflows of capital as investors move out of the Euro, and it’s gotten to the point where it may be financially untenable for the SNB to try to intervene again.
Pound (GBP): The pound is higher against all but Yen, as the market “needs” somewhere to park its capital. This is a vote of confidence for the UK budget plans and BOE policy statement which show that the UK may be in the best position to tackle their debt and see growth at the same time. The Pound is back to 1.5 vs. USD.
Dollar (USD): Oh the dollar. It’s catching a bid from risk-aversion, but it’s clearly no beauty-prize winner either. Yesterday’s FOMC meeting and new home sales figures all but take a rate hike off the table for 2010. This morning, jobless claims are lower than the previous week, but still in ridiculously bad territory. Durable goods orders rose ex-transportation, but overall they shrank, though less than expected. Bottom line: the US economy is still weak. Until policies are instituted that will incent companies to create jobs, our slide into Japan-style stagflation is imminent.
Yen (JPY): The Yen is higher across the board on risk-aversion. Japanese stocks are lower as concerns over Europe may hurt Japanese exports, which have been driving economic recovery.
Unfortunately for the world, the US still rules the roost. We started the economic crisis, and now we’re pro-longing it. Yet bad behavior has been replaced by bad policy; and we are slowly sliding into the economic abyss as politicians compete for the next vote.
Meanwhile, banks have been bailed out, executives have paid themselves enormous bonuses, and they sit on the money and don’t lend for fear that regulatory and other economic factors will make it a losing proposition. Or they can’t lend, because they have too many toxic assets sitting on their books and are anticipating the next wave of deflation that will put more home-borrowers under water.
The “solution” to the housing crisis was the tax credit, and it’s just been reported that 14,000 unscrupulous folks bilked the government out of some $25 million, including 240 death row inmates. Government efficiency at its finest! What’s a few million anyway? We’re TRILLIONS in the hole already, and we’ll just keep spending.
Oh yeah, but at least we’re not the EU! Have treasury put that on the dollar bill!
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
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Possible Intervention?
By Mike Conlon | May 21, 2010
Talk is heating up around the globe that Central Bank interventions could be forthcoming in order to stabilize the currency markets. Currently, the Swiss National Bank (SNB) has been active in trying to maintain prices for the Franc vs. the Euro, and now the market is jittery that a meeting today of Euro zone finance ministers could produce a similar result. In addition, the BOJ has been known to intervene in its currency in the past, and there is speculation that Australia may be set to intervene as well.
This is effectively a form of market manipulation, but can be very profitable for investors who are on the right side of the trade. In this regard, should interventions occur, investors would want to be long the Euro and Aussie, and short the Yen and Swiss franc. Intervention is already occurring in Switzerland so this trade may be over, but what is important to know is which way policy makers want the currency in question to go.
In addition, German law-makers in the lower house have approved the Euro rescue package, as it is also in Germany’s self-interest to make sure that the Euro doesn’t collapse.
So what we’re seeing this morning is continued short-covering from yesterday afternoon and speculators starting to dip their toes back in cautiously to riskier assets. Traders do not want to be caught short over the weekend, especially if coordinated action is taken.
In the forex market:
Aussie (AUD): The Aussie is higher on short covering after aggressively declining for 5 days in a row. Speculation of possible intervention has led the market to cover their short trades, so don’t mistake today’s action for risk-taking, though early investors may be starting to test the waters to the long side.
Loonie (CAD): The Loonie is higher this morning as retail sales figures rose the fastest in nearly 5 years, and CPI figures came in slightly higher than expected, showing signs that economic growth is heating up in Canada. While a June rate hike is still expected for June, much of it will be predicated upon whether or not the Euro can stabilize and whether risk has been reduced in the market.
Kiwi (NZD): Consumer confidence rose 3.4% in NZ, showing signs of economic life in the country. In addition, income tax cuts are expected to encourage workers to stay home which will be positive for domestic economic growth. The Kiwi is higher on short-covering as well.
Euro (EUR): The Euro touched one-week highs in the overnight session, as German law-makers approved the Euro rescue plan. The looming threat of intervention has helped push it higher as traders don’t want to be trapped short over the weekend. In addition, German GDP figures came in as expected, showing a gain of .2% for Q1 after being flat the previous quarter.
Pound (GBP): The pound is also higher as it has been beaten up with the Euro over the last few sessions. Expect the Pound to trade somewhat sideways as investors weigh UK policy vs. the threat of continued Euro problems.
Dollar (USD): The Dollar is weaker this morning as short-covering is taking place. Expect the Dollar to continue to trade on risk themes, though note that today is not a risk-taking day as both commodities and US stock futures are lower so far this morning. Global austerity measures could affect US stock growth as demand wanes world-wide. Especially with blue-chip and technology companies that have large exposure to the EU. In addition, financial reform bills passed in Congress are adding fuel to the fire.
Yen (JPY): The Yen is trading lower on short-covering rallies as well, and overnight, the BOJ left rates unchanged at .1%. In what I would consider as something of an anomaly, the Yen is trading higher against the Dollar further illustrating that this is not a pure risk-taking day. While the Yen is still far away from levels that the BOJ would consider in order to intervene, they have been known to act in the past.
Because today is a Friday, the market is taking a respite as fear has ruled this week and the potential for central bank interventions have caused uncertainty. Right now we are at an inflection point; where markets could go one way or another and which way that will be is anyone’s guess.
So in the meantime, I advise taking cues from the market and take profits if you have them, and wait for next week’s action to initiate new trades. More than one trader has “blown up” by coming in Monday morning to a bit of nastiness in the form of central bank intervention. And while it is unlikely that this will happen, the threat is enough to cause caution.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
Tags: account, AUD, Aussie, Australia, bank, cad, canada, central bank, commodities, course, currenc, currency, currency market, currency trading, dollar, economic, EUR, Euro, fear, financial, forex, forex market, franc, free, fx, fxedu, gbp, home, Il, interest, intervene, intervention, invest, investor, jpy, Kiwi, life, live, loonie, lower, meeting, Mike Conlon, nzd, pound, practice, practice account, rate, retail sales, short, ssi, stock, Swiss, Switzerland, time, trade, trader, trades, USD, Yen
Topics: What To Look At In The Market | 1 Comment »
A Good Friday?
By Mike Conlon | April 2, 2010
All eyes are on this morning’s Non-Farm Payrolls report which is due out at 8:30AM EST. Stockholders anxiously await this figure as their market is closed today so those that didn’t hedge against potential downside risk may be a bit nervous going into this number and subsequently this weekend.
The NFP report is expected to show a gain of 184K jobs; however I read somewhere that some 70K of those jobs were due to hiring by the government for the census, which by all accounts is temporary. So there is a lot of uncertainty about what the market needs to see to form the opinion that the UD economy is recovering. Regardless, of what the number is, expect mucho volatility surrounding it.
In other news, the Swiss Franc made headlines yesterday as a major amount of selling hit the market near the close in Europe. While not confirmed by the Swiss National Bank (SNB), speculation is that the government intervened in the currency to weaken it and keep it from appreciating to further record highs. I don’t talk about the Franc much here, but the Swiss have been known to do this in the past as recent Euro weakness has caused Franc strength. The sell-off was good for roughly 350 pips vs. the Euro, a tidy profit if one were on the right side of the trade.
So this morning we are seeing dollar strength, and without the other markets trading to provide correlations and historical trends, the forex market is on its own today. So expect trading to be dominated by risk themes and little else today.
In the forex market:
Aussie (AUD): The Aussie is slightly lower as the market as traders pare back positions heading into NFP. The AUD/USD will be extremely volatile as it best represents the risk on, risk off trade.
Kiwi (NZD): The same deal for the Kiwi as the Aussie, though slightly more at risk as the Kiwi attempts to shake off the IMF’s claim form yesterday that it is over-valued by 10-25%.
Loonie (CAD): Will today be the day that the Loonie reaches parity with the US dollar? It came within 65 pips of doing so yesterday, and is currently sitting just over a penny away.
Euro (EUR): The Euro is just hanging in there above 1.35 vs. USD and is benefiting from the “no news is good news” mantra today.
Pound (GBP): The Pound has been on a tear as of late as exports have improved causing stocks to move higher. In addition, advance polls show that the Conservatives are leading right now, giving a glimmer of hope that fiscal responsibility may return to the UK.
Dollar (USD): I’ve already mentioned the Dollar above and the expectations, but my feeling is that initially we are going to see dollar strength, followed by dollar weakness brought on by a better than expected number. While I don’t like to guess at these things and I’m not trading this event, I must admit I’m totally confounded by this report. So I’m just gonna sit on my hands and watch the action from the sidelines.
Yen (JPY): The Yen has been weakening as appetite for risk and yield-seeking has been ferocious. This suits the Japanese just fine as a weak yen is good for exports.
So unless you have nerves of steel, I suggest you grab a bag of popcorn and sit back and watch this event unfold. (I realize its 8:30 AM and no one eats popcorn then, but I do have a European following and as they say with regard to other pastimes, “it’s always noon somewhere!”
I’m going to try to do the video live for the release of the number and am hoping that the increased craziness surrounding it doesn’t invoke technical difficulties.
Happy Good Friday and Easter weekend to those that celebrate it!
To learn more about how you can get started in the forex market, be sure to check out our currency trading courses!
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Topics: What To Look At In The Market | 1 Comment »
What is Chermany?
By Mike Conlon | March 18, 2010
Remember this word: Chermany. It is the new, hip lingo for speaking about China and Germany. What do these two have in common, you may ask? These are the top 2 largest exporters of manufactured goods in the world. As you might expect, this means that they have trade surpluses and thus are in positions of great strength on the world economic scene. Because of this, rightly or wrongly, Chermany feels like they can dictate terms to the rest of the world.
So it should come as no surprise that Germany is leading the charge to obstruct bailout plans to Greece in the drama that has been unfolding. In the latest act, Germany is saying Greece should seek economic aid from the IMF, and not the EU. This undermines previous efforts made to assure the marketplace that this situation is under control. As a result, mild risk aversion is the early-morning theme.
The other side to this new term is China. While I don’t focus on China too often as we can’t trade in their currency, their importance on the world stage cannot be understated. China has “pegged” their currency to the US dollar in an effort to keep it from floating freely in the market like almost every other currency out there. Many would say that this is blatant currency manipulation, and has been one of the major reasons why they have accrued such an economic surplus. Because they have been allowed to operate under these conditions for some time, their ill-gotten wealth has now emboldened them to continue with this policy, regardless of its impact on world economics. The US is now trying to turn up the heat on China, and whether or not anything comes of this remains to be seen. Stay tuned.
In currencies:
Aussie (AUD): The Aussie is lower this morning on risk aversion and on concerns that China will take steps to slow down their economy. Because China is a major importer of Australian raw materials, this could have an impact on the Aussie going forward.
Kiwi (NZD): The Kiwi is higher this morning, bucking risk aversion and quite frankly I’m not sure what’s going on here. They came out with Consumer Confidence figures in the overnight session, but I can’t get a good reading on whether or not those figures were significantly better or not. Regardless, the market seems to like the Kiwi, as it’s up across the board.
Loonie (CAD): The Loonie is slightly higher this morning, and near flat with Yen and the US dollar. They are down-playing concerns of Dollar/Loonie parity as this seems to be a foregone conclusion. There was some concern that the government may try to intervene, however this does not appear to be the case.
Euro (EUR): The Euro is lower today in response to German resistance to the Greek bailout. The rest of the EU thought they had measures in place, only to find out that Germany was not on board. Chancellor Merkel mentioned the other day that “expulsion” should be an option for countries that don’t comply with EU membership stipulations.
Pound (GBP): The Pound is lower this morning as good news that the budget deficit for February was less-than-expected was trumped by disappointing mortgage approvals. In addition, the political rhetoric is starting to heat up which is contributing to the fears of a “hung Parliament”.
Dollar (USD): The Dollar started the morning higher on risk aversion but now looks like it this may reverse after the CPI and initial jobless claims figures came out. As I mentioned yesterday with the PPI figures, today’s CPI figures show lower-than-expected gains which is basically buying time for the Fed to keep rates low for that “extended period” they love so much. As long as the Euro doesn’t implode, I expect risk-taking may occur by the end of the day.
Yen (JPY): Word today is that the measures the BOJ took yesterday in doubling the monetary easing program may have little effect on deflation. As I mentioned yesterday, just because the amount of money available for loan increases, does not mean it will be lent out. If demand decreases, then prices typically fall. We are seeing this exact same situation here in the US housing market.
The world economy is a cycle of “give and take”. What is starting to become apparent is that countries that benefit from low currency value whether through manipulation (China) or through inclusion in a monetary union (Germany) need to be wary that by effectively “cornering” the manufacturing market, they are setting up untenable situations that can only end badly.
It will be interesting to see if the market forces Chermany to take action, or if they try to “take their toys and go home”. Either way, world economic recovery hangs in the balance.
To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!
To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!
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Topics: What To Look At In The Market | 1 Comment »
O, Canada!
By Mike Conlon | October 9, 2009
Good news this morning out of Canada regarding their unemployment figures has propelled the Canadian dollar (CAD) to a one year high. The unemployment rate dropped from 8.7% to 8.4% as the Canadian economy unexpectedly added some 30,000 workers. CAD is up across the board, most notably against the Japanese yen (+2.16%), the Kiwi (+1.93%) and the Euro (+1.15%).
Its also up against the US dollar (+.81%) as the dollar has found its own strength with some jaw-boning from Ben Bernanke early this morning. The dollar is up most vs. the yen (+1.32%) as well as the other Majors. This also falls in-line with with my previous commentary on the Yen, that 88 appears to be a short to mid-term bottom. Rumors that the Japanese would intervene at that level are also contributing to Yen weakness today (see CAD and all other crosses).
Questions remain about when the Fed might act, but don’t forget that the currency market is forward-looking, so any indication that Bernanke may be willing to raise rates or remove QE is seen as positive for the US dollar, despite the fact that Big Ben maintained the Fed Mantra “for an extended period” in his statement regarding accommodative policy.
One thing to note about Bernanke’s comments is that he will tighten when the economy “has improved sufficiently”. What this means is anyone guess but as I have stated in other comments, this could be sooner than later.
The other side of the coin is that the US economy is NOT recovering, which could lead to further dollar declines. However, pressure coming from abroad may force Bernanke’s hand sooner than he’d rather move.
So once again all eyes are on Bernanke. Let’s see what happens.
Tags: Bernanke, cad, canada, comments, currenc, currency, currency market, dollar, economy, EUR, Euro, falls, fed, Il, intervene, Japan, Kiwi, Mike Conlon, news, rate, short, unemployment, Yen
Topics: What To Look At In The Market | 1 Comment »
Nothing Big Today– Thankfully!
By Mike Conlon | October 7, 2009
As of 11AM EST, there are no major currency moves to speak of. Thankfully. Volatility has picked up and US dollar weakness has been a major theme. With gold rising to 1050/oz, the doomsday crew and conspiracy theorists are out in full force, suggesting that this could be the end for the US dollar.
It has become apparent to me that the Fed and Bernanke need to do something (raise rates even a token 25 bp) to defend the dollar, even at the risk of a housing price decline. While this move may not be popular here in the US, it would be welcomed by the rest of the world.
Because as of right now, it looks like the US dollar could get a whole lot worse. And my experience has taught me that its when things look the bleakest that we should be the most optimistic. So I’m hopeful that the Fed will move soon.
So USD is up marginally today, most probably due to short-covering or what looks like the infamous “dead-cat bounce”.
Also to not is that USD/JPY tested 88 in the over-night session. Many believe that the breach of that level would cause the Japanese to intervene.
Stay tuned– because it looks like the fun is just about to get started!
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A mild intraday theme has emerged.
By Sean Hyman | April 1, 2009
Within the last couple of hours, a new (mild) intraday theme has emerged: CHF weakness.
It’s pushed up GBP/CHF mainly (up 1.50%) but also is bringing up USD/CHF and EUR/CHF. As a reminder, remember that
Also, the euro has remained mildly weak, probably due to the upcoming interest rate decision later on this week. Expectations are from 1.50% down to 1.00%. So we’ll see what they do. However, I’m sure a lot of big money is avoiding the euro as much as possible until that rate decision is known.
Sean Hyman
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Here’s the full story on the Swiss Franc.
By Sean Hyman | March 12, 2009
Here’s the full story on the Swiss franc this morning: http://www.bloomberg.com/apps/news?pid=20601087&sid=awHMlSPjSp8U&refer=home
Tags: CHF, currencies, currency, dollar, euro, forex, franc, fx, fxedu, interest rates, intervene, intervention, invest, lower, market, money, movement, mywealth, parabolic, Sean Hyman, spot, swiss, trade, trader, trend, uptrend, wealth, yen
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