« Possible Greek Bailout? | Home | It’s Official! »
Snowed In!
By Mike Conlon | February 10, 2010
Snowed In!
As major snowstorms move across the US, the forex market keeps chugging along. In what’s likely to be a low volume day today, we are seeing some mild risk-aversion this morning. Earlier, reports out of the UK show lower than expected inflation and a lower revision to GDP, as the retail sales figures accurately predicted yesterday.
This morning, both equity futures and commodities are giving back overnight gains, which may mean a lower opening in the US. Today could be volatile if traders in the US are enjoying the snow and not the “order flow”. With the only major news out of the way already today, the persistent theme of Euro zone uncertainty could also come into play.
On to the currencies:
Aussie (AUD): Trading lower on risk-aversion themes. Tomorrow Australia reports their employment figures so this could be the gauge that the markets have been looking for if the number comes out better than expected. The Australian economy has by far been the strongest throughout the Great Recession, so any weakness could trigger risk-aversion trades.
Kiwi (NZD): Trading lower with the Aussie on risk aversion and flat commodity process.
Loonie (CAD): Down as well, but showing some strength against the Euro and Pound.
Euro (EUR): The proposed bailout of Greece has lead to speculation over the size and scope of the plan and whether or not contagion will occur with the other PIIGS nations.
Pound (GBP): The Pound is the big loser this morning, most notably against the Yen and USD. As previously mentioned, UK inflation is forecast to come in short of the BOE’s target of 2%, and now GDP is predicted to be lower, taking monetary tightening off the table for perhaps the rest of the year. Translated: no rate hikes. Definitely a pound-negative report.
Dollar (USD): Trading higher on risk-aversion as would be expected. The trade deficit figures came in a little larger than expected, but nothing earth-shattering. Tomorrow retails sales figures come out which should foreshadow GDP figures, as the US consumer makes up some 70% of US GDP.
Yen (JPY): The yen is higher on yep– you guessed it—risk aversion themes and carry trade unwinds ahead of tomorrow’s Australian employment report.
Overnight, equity markets were up in Asia and are currently up in Europe. US stock futures are trading slightly lower pre-open.
Oil and gold are flat today, and it’s interesting to note that Wednesday’s usual API oil inventories report had been pushed to Friday because of the weather. Amateur oil traders may presume that the snowstorm here in the US will mean increased demand for oil, but today’s delay of the report may push any temporary strength off until Friday.
To learn more about the forex market, be sure to check out our currency trading courses!
Tags: AUD, Aussie, cad, course, currenc, currencies, currency, currency trading, dollar, dow, economy, EUR, forex, fxedu, gbp, Il, interest, jpy, mike conlon, news, nzd, rate, ssi, trade, Yen
Topics: What To Look At In The Market | No Comments »