Analysis Topic: Currency Market Analysis
The analysis published under this topic are as follows.
Thursday, July 17, 2008
Don't Buy the US Dollar Head Fake / Currencies / US Dollar
By: John_Browne
This week, we were treated to strong statements by both Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke about the desirability of a “strong dollar”, and the intention of policy makers to pursue strategies that will enhance its value. To the relief of many, the dollar responded to the moral support and managed a mild rally. The move is inconsequential. The harsh realities have not changed in the slightest, and the dollar is set to continue its overall decline.
Although some investors respond to such jawboning, the more sophisticated international players, who in large part determine the foreign exchange market, do not. Why the bearish sentiment despite the bullish talk from Washington?
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Thursday, July 17, 2008
Australian Dollar Looking Over Extended Against US Dollar / Currencies / US Dollar
By: Black_Swan
There is little doubt about the powerful run in Aussie—for good reason: 1) Strong economic growth, and 2) Highest yield among the major currencies.
Most analysts believe the next stop is par, or 1.000 against the US dollar. Another panic run out of the dollar likely leads to par. But on technicals alone (granted not too useful in a fear-driven market) the Aussie looks extended and due for a breather. Risk/reward!!
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Thursday, July 17, 2008
US Government to Intervene to Prevent US Dollar Collapse / Currencies / US Dollar
By: Mark_OByrne
While risk appetite has increased with equity markets having a renewed bout of misplaced exuberance, this is likely to be short lived as equity markets experience another dead cat bounce. Barclays reports overnight that their “sentiment-based equity risk indicator remains within extremely bearish territory, and suggests that equities may continue to sell-off aggressively.” Poor returns and volatility in equity markets internationally is leading to safe haven diversification into gold. With the outlook for equities and bonds looking increasingly uncertain (especially in the light of the onward march of inflation in the U.S. and internationally), gold is set to continue to outperform other major asset classes for the foreseeable future.
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Monday, July 14, 2008
Swiss Franc to Benefit from European Carry Trade Against British Pound / Currencies / Forex Trading
By: Black_Swan
The ramp-up in credit risk in the market is huge. The pound is acting well today on the back of market risk. But, in the recent past the Swiss franc has been the star currency that has acted very well on risk, for two reasons we think:
1) Switzerland still hanging on to some reservoir of safe haven status in times of global trouble (and despite severing its gold link to its currency, it is still has a larger gold backing than any other of the major currencies).
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Monday, July 14, 2008
New Zealand Dollar Runs Out of Steam as Interest Rate Cuts Beckon / Currencies / Forex Trading
By: Money_and_Markets
Jack Crooks writes: Last week I told you the U.K. could see a worse economic downturn than the U.S., and said that would weigh heavily on the British currency.
Meanwhile, one of my readers who resides Down Under recently told me that he's afraid to trade the Australian dollar.
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Friday, July 11, 2008
US Dollar / Japanese Yen Homing in On Break Below 105 / Currencies / Japanese Yen
By: Black_Swan
A subscriber recently emailed us the other day and asked, “What happened to the Japanese yen?”
There was nothing else written in the email except that. And since nothing notable has really happened to the Japanese yen in the last few months, I can only assume he was asking why the Japanese yen disappeared from our radar.
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Friday, July 04, 2008
Three Conditions for Day Trading the Non-Farm Payroll (NFP) / Currencies / Forex Trading
By: Yvonne_L_Marchant
Low Risk - High Reward – Does it exist? My friend who lives in Perth , Australia , has just come back from two weeks surfing in the beautiful blue waters of Sydney . Can you believe it? It is meant to be the middle of winter over that side of the world! Needless to say he hadn't been doing much trading. So to get him back into the swing of things, I was telling him about how I trade the Non-Farm Payroll (NFP). Read full article... Read full article...
Wednesday, July 02, 2008
US Dollar on Edge of BREAKDOWN, Gold on Verge of BREAKOUT / Currencies / US Dollar
By: Jim_Willie_CB
The US Dollar is on the edge of the chasm again. The nonsense has been cast aside about a bank recovery, a housing stabilization, and an economy that can withstand a spillover. How incredible it is to see grown adults accept such marketing and promotional drivel. Wake up and smell the blood! The US financial and economic system has never been so vulnerable in almost a century. What we see now is far more dangerous than the 1970 decade, characterized by vast cost shocks. Back then, China was not a player. Its current presence puts a price ceiling on finished product pricing power, and even more importantly, on wages broadly in the labor market. Households cannot afford higher prices, as bankruptcy pain escalates. Read full article... Read full article...
Wednesday, July 02, 2008
Coming Wave of Government Regulation and the Risk to the US Dollar / Currencies / Market Regulation
By: Joseph_Brusuelas
Over the past several months it has become clear that there is a cauldron of regulation brewing in Washington. The bursting of the subprime bubble and dislocation in the financial sector has brought with it, in its aftermath, the risk of overregulation. Members of the political class are brimming with confidence that the political, economic and social considerations have aligned to finally tame the market. Serious consideration is being given to policies that would curb the ability of investors to hedge against future instability in markets, engage in financial innovation and even determine the pay of senior managers, much less corporate executives. What is beginning to take shape is not a necessary bout of reform, but a wave of regulation that will stem that necessary flow of investment into the US and put the dollar at greater risk. Read full article... Read full article...
Tuesday, July 01, 2008
FX Forecasts: Fundementals Remain Weak for the US Dollar / Currencies / Forex Trading
By: Ashraf_Laidi
What began the month with an unexpected bang in currency markets ended with a not so unexpected whimper. Fed Chairman Bernanke's eventful speech of June 3rd to the International Monetary Conference supporting the dollar was seen as the possible end of Washington's policy of benign neglect towards its currency. But the economic fundamentals wouldn't play along.
US Treasury Secretary urged the Gulf States not to end their pegs to the dollar or not to even revalue their currencies against the greenback. Saudi Arabia conformed to Paulson's requests urging the rest of GCC states to do the same. And in order to make that possible, i.e. to combat the inflationary pressures of pegging their currencies to a falling dollar, Saudi Arabia increased oil supply by 200K barrels per day and even hosted an extraordinary summit in Jeddah where oil producers and consumers could work out their differences.
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Monday, June 30, 2008
Aussie Dollar: A Short Set-up Developing … / Currencies / Forex Trading
By: Black_Swan
Sometimes we like to give you a free glimpse into what types of trade set-ups we watch for and act on in our premium services. Here’s an interesting set-up that’s caught our eye ...
There are a couple things going on that are impacting the price of the Australian dollar versus the US dollar. Among them: interest rates, economic developments and the global risk-taking environment.
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Monday, June 30, 2008
Interest Rates Tightening Bias to Spark Emerging Markets Forex Rally / Currencies / Emerging Markets
By: Money_and_Markets
Jack Crooks writes: If you think the U.S. has inflation problems, get a load of this ...
Year-over-year consumer prices in Vietnam just surged by a whopping 26.8%. The month-over-month numbers jumped a cool 2.1% — or what the Federal Reserve would consider a comfortable pace for inflation in the U.S. over the course of an entire year.
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Sunday, June 29, 2008
The Historic Fate of Paper Money / Currencies / Fiat Currency
By: Mike_Hewitt
"Paper money eventually returns to its intrinsic value - zero." (Voltaire, 1694-1778)
The first well-known widespread use of paper money was in China during the Tang (618-907 A.D.) dynasty around 800 A.D. Paper money spread to the city of Tabriz, Persia in 1294 and to parts of India and Japan between 1319 to 1331. However, its use was very short-lived in these regions. In Persia, the merchants refused to recognize the new money, thus bringing trade to a standstill. By 1455, after over 600 years, the Chinese abandoned paper money due to numerous problems of over issuance and hyperinflation.
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Friday, June 27, 2008
Fed Intervention Will Not Stop the US Dollar's Slide / Currencies / US Dollar
By: Peter_Schiff
This week the Federal Reserve took a step closer to acknowledging reality. Unfortunately it didn't let that admission move it from a policy course firmly guided by fantasy. In its policy statement, Bernanke & Co. took the important step in noting that inflation expectations had taken hold in the country at large. However, in asserting that it expects inflation to moderate this year and next, the Fed gave no indications that these heightened expectations are gaining traction within the Open market Committee itself. As a result, it signaled no likelihood that it was actually prepared to do something to fight a problem which it doesn't really believe exists in the first place. Read full article... Read full article...
Friday, June 27, 2008
Sinking Fiat Currencies / Currencies / Fiat Currency
By: Mike_Hewitt
Fiat money is not directly convertible into a physical commodity at a specified amount. It is a type of credit money through which a central bank issues notes in exchange for interest-paying bonds by the government. The interest on these bonds is paid by the government primarily through the process of taxation. That is to say, by you and me.
Since the interest plus the principle always exceeds the initial amount borrowed, the government must continually borrow more money, at additional interest, in order to repay the central bank, thus beginning an ever-increasing spiral of debt.
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Thursday, June 26, 2008
The Norwegian Krone as the Next Reserve Currency? / Currencies / Euro-Zone
By: Paul_L_Kasriel
Today, the Norges Bank, the Norwegian central bank, raised its policy interest rate 25 basis points to 5.75%. That puts the Norges Bank's policy rate 293 basis points over the May year-over-year CPI inflation rate on a harmonized basis (see Chart). Notice that the Norges Bank was raising its policy rate in the first half of 2007 as the inflation rate was falling. The Norges Bank is offering savers an "honest" return on their funds. Isn't this what you would look for in a reserve currency's central bank?Read full article... Read full article...
Friday, June 20, 2008
EUR USD: Pattern for Profits / Currencies / Euro
By: Black_Swan
Lots of times trading will reward you if you find patterns in historical price data and bet on it occurring again. It’s kind of like the whole “History repeats itself!” motto. Of course, history doesn’t keep on repeating itself, especially in financial markets. But there is another motto to remember: “The trend is your friend!”Read full article... Read full article...
Friday, June 20, 2008
US Current Account Deficit is Still A Drag On the US Dollar / Currencies / US Dollar
By: Joseph_Brusuelas
Lost amidst recent data on inflation, the rise in oil prices, a deepening crisis in the housing market and the uncanny ability of Goldman-Sachs to outperform market expectations was the deterioration of the current account balance in Q1'08. The U.S. current-account deficit increased to $176.4 billion in the first quarter of 2008 vs. the $167.2 billion recorded in the fourth quarter of 2007. The primary catalyst for the increase was a decline in earnings from foreign investments and the sharp increase in the cost of imported oil. Should such an unsustainable and large deficit continue to persist, the value of the dollar over time could see another sharp adjustment due to the combination of global macroeconomic imbalance and the unwise economic domestic economic policies pursued in the US over the past few years. Read full article... Read full article...
Wednesday, June 18, 2008
US Economic Disappointments Point to a Continuing Rebound in the Euro / Currencies / US Dollar
By: Ashraf_Laidi
Activity may be quiet in today's US data calendar so it is time to further shed light on next week's key events. Sunday's emergency meeting in Saudi Arabia between oil producers and consumers, combined with next Wednesday's FOMC decision may serve as a powerful recipe for a lasting dollar rebound and effective containment of oil price increases, especially for the US, Europe and Japan. Read full article... Read full article...
Wednesday, June 18, 2008
US Dollar / Japanese Yen Low Risk Opportunity / Currencies / Forex Trading
By: Black_Swan
We’re wondering: How credible is the Japanese yen risk-aversion play? Stocks have been less than stellar lately yet the yen has pretty much been sliding against the buck. That’s not exactly how it worked when subprime, credit crunch and writedowns were the new buzz words on Wall Street.Read full article... Read full article...