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The most recent bout of investor risk aversion cites numerous causes:
• Chinese regulators draining liquidity from their domestic markets
• The possible end to Chinese stockpiling of commodities
• The possibility of U.S. Federal Reserve chairman, and architect of their quantitative easing programme, Ben Bernanke, not being reappointed for a second term
• Sovereign debt worries, especially concerning [...]
Multiple factors weighed on markets this week, including European sovereign debt concerns, developing economies including China and Brazil initiating their liquidity exit strategies, and U.S. political issues such as Fed Chairman Ben Bernanke’s reappointment vote and proposed banking regulations which could slow the recovery even further. Risky trades lost favour, including commodities, and the VIX [...]
The AUD/CAD currency pair remains one of the strongest trending pairs in the forex trading market. From its 2008 low of 0.7724, reached 2 February, to its high of 0.9912, reached 9 November, AUD/CAD sustained a bullish trend that gained 2188 pips, or 28%, in nine months.
However, since the peak of investor sentiment on 9 [...]
The Greek financial tragedy continues, with Eurozone peripheral debt spreads widening and putting pressure on the Euro even as U.S. fundamental data disappointed. Risk aversion wasn’t helped with U.S. consumer credit warnings from JP Morgan and Citigroup in their earnings reports, and falling commodities prices, particularly gold and crude oil, dampened commodities exporters.
The Australian economy [...]
European sovereign debt concerns and Japanese cabinet shuffling encouraged risk aversion flows into the U.S. dollar but technical factors limited the USD upside.
Consider this common situation:
Humans tend to prefer round numbers, and often retail and commercial traders congregate their entry orders at or very near such a level. Dealing desk traders know this. They also know that the amount of money earned by the desk is directly related to the number of these trades that are activated, [...]
The forex trading week saw European majors and investor confidence roiled by a Greek financial tragedy, mixed fundamental data, and thin liquidity all aiding USD strength.
Australia’s 3Q2009 GDP printed 0.2% q/q, half market expectation, and 0.5% y/y. RBA meeting minutes were mixed and hinted of further losses in employment even as 3Q2009 housing starts surged [...]
With the continued widening of the interest rate differential between Australia and Japan, one would expect the currency pair involved to be strengthening toward the AUD side. This has been happening, but it has not been a straight line, as shown on the daily chart, below:
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