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Week ending 29 May 2009: The forex trading market punishes USD over fiscal policy, with surging commodities prices and bond yields adding further downward pressures. The RBA meet Tuesday, 2 June and are expected to retain steady rates at 3.0%. March Westpac leading index rose 0.3% m/m, the Conference Board 0.4%, while May DEWR skilled [...]
With the death of risk aversion trades, the forex trading market has broken with its previous behaviour patterns and the search for its new one has begun. Here is one possible scenario. In mid-July 2008, investors abandoned every variety of risky assets, including equities and commodities. They bought U.S. dollars and sold almost every other [...]
Week ending 22 May 2009: A major revision in markets’ opinion of U.S. financial stability contributed to widespread USD depreciation late in the forex trading week, exaggerated by position squaring and light volumes ahead of a long weekend in the U.K. and U.S. This potential reversal of USD long positioning and risk aversion trading leaves [...]
Financial and forex markets currently appear undecided at best and schizophrenic at worst. One day markets trade on the “recovery story,” with stocks and commodities rising while bonds fall, causing growth currencies such as the Australian, Canadian, and New Zealand dollars to appreciate against the safe-haven currencies such as the U.S. dollar, Japanese yen, and [...]
Week ending 15 May 2009, Consolidation continued amongst many currency pairs as U.S. retail sales forced economic reality into financial markets, although US TIC flows and Japanese government figures confirm international funds moving from flight-to-quality bonds into equities. Australia’s April NAB business confidence fell to −14 while current business conditions improved to −10. March home [...]
Many currency pairs within the forex trading market remain balanced near technical tipping points, as if traders are uncertain which direction the various financial markets may take. With dealer and analyst chatter increasingly focusing on the probability of recent equities gains comprising no more than a “sucker’s rally,” as in this recent canny editorial by [...]
Forex Trading Week ending 8 May 2009: Global equities markets continue to rally on nil, as most economic data indicate not a stabilisation but a less dramatic contraction with numerous downside risks remaining. Commodity and higher-yielding currencies gained as safe-havens declined in a widespread shifting of ranges. The RBA held rates steady at 3.0% but [...]
With risk aversion easing and risk acceptance re-entering the forex trading market, the U.S. dollar and Japanese yen are shedding their roles as safe havens for parking investor capital and resuming their more usual roles as currencies representative of their national economies, the former consumer oriented and the latter driven by exports. In such capacities, [...]
