How to trade forex cross pairs
Marek D. Chelkowski
Published 4/1/2010
The U.S. dollar is the reserve currency of the world and as such, its
fundamentals and technicals are paramount in any trade involving it.
There are times when some news out of the Fed creates a market spike
that takes you out of a trade.
In the last 20 years, the world that was divided politically between
the ideologies of democracy and communism has become one, with a few
small exceptions. The global financial players have responded to that
transformation by sharing one stage and having access to equities,
bonds and commodities the world over almost equally and
instantaneously.
This brings us to a central place in today’s financial world: currency
markets. The spot currency markets are not only central within the
global financial system, but they also have become an asset class.
They offer great opportunities to traders and asset allocators alike
with uninterrupted trading from 5 p.m. EST on Sunday in New York until
the same time on the following Friday. The inter-bank currency
markets, long a domain of large banks, hedge funds and professional
speculators, in 2001 welcomed small investors.
Many banks and futures commission merchants (FCMs) made it possible
for investors with a few thousand dollars to trade their accounts by
offering electronic trading platforms with multiple currency crosses.
The currency markets are not linear. Crosses of the U.S. dollar vs.
major currencies are certainly an intricate, most liquid, very
important component of the forex markets, but many other pairs offer
great opportunities, if one understands their response, and their
behavior in relation to different multiple events taking place
continuously within the global financial markets. There has never been
a time in recent financial history when equities, bonds, commodities
and currencies have been so intertwined and accessible with the
Internet, allowing the traders to react to markets with one click of a
mouse.
Many traders exclusively trade U.S. dollar versus G-7 currencies, and
by this not only give up many opportunities in other crosses, but
limit their playing field.
The currencies at their core are driven by interest rates, local
economies and flow of funds in or out of that individual currency
zone. There are a few basic differences between trading major crosses
and crosses of other currencies also called exotic crosses. The
liquidity in exotic currencies is certainly lower, which translates to
wider spreads.
For example: while EUR/USD or USD/JPY may have spreads between bid and
offer from choice (no spread) to one to two pips, traders should
expect spreads in exotic currency crosses from three to 10 pips,
depending on the time of the day, which is directly linked to
liquidity and depends on the spreads the dealer offers. However, the
major cross pairs like EUR/JPY are quite liquid.
That also means that the costs of the trade are much higher when one
has to buy/sell with seven-pip spreads. Traders based in different
time zones have to be cognizant of the liquidity in the markets and
upcoming economic numbers in that currency zone and be prepared for
significant volatility during that time.
By trading a wide range of currency crosses, traders may be able not
only to diversify within forex markets but also have an opportunity to
establish positions that to some extent can offset each other.
However, trading multiple crosses resulting in many open positions
creates other problems if one is not versed in the markets and should
only be done by experienced traders.
The pound sterling has an interesting relationship with the dollar and
euro and its own unique fundamentals. There are a couple of instances
in the last six months when a bullish position in the pound vs. the
dollar would have been a loser, but a major winner against the euro.
While the fundamentals of the dollar and euro probably were the major
drivers, if the only way you could play the pound was vs. the dollar,
you had no chance to take advantage of the pound’s outperformance of
the euro (see “Pounding the euro”).
There are a number of crosses that are quite popular with traders and
do not involve the greenback. One of the most popular, very widely
traded is Japanese yen vs. G-7 currencies.
In so-called carry trades, Japanese yen vs. higher yielding currencies
(Australian, Canadian and New Zealand dollar or the euro), traders are
selling short yen and buying other currencies for a positive spread in
interest rates. For example, in 2004, Japanese interest rates were
close to zero and the Australian dollar was at 7.25%. Essentially, the
trader was being paid handsomely by borrowing in Japan and depositing
his funds in Australia.
Carry trades are not only a way to capture interest rate
differentials, but also a vote for or against risk as it was
quantified in the financial world. During the height of the financial
mania in 2008, with the risk being priced in relation to U.S.
Treasuries at negligible levels, EUR/JPY was trading close to 170 yen,
and the Australian dollar vs. yen was at 105 yen.
The traders not only got paid with higher interest rates, but also
through capital appreciation. Carry trade crosses reversed violently
when the financial crisis hit in September 2008 and AUD/JPY went from
105 to 55 EUR/JPY from 170 to 114, GBP/JPY from 251 to 118 (see
“Carrying charges,”).
In addition to interest spreads that ballooned between Treasuries and
junk bonds, nothing reflected extreme fear in the markets better than
the carry trades collapse. Another very interesting group of
currencies is commodity currencies: Australian, Canadian and New
Zealand dollars, Brazilian real, South African rand and Russian ruble.
These countries are major exporters of commodities and their
currencies respond to strength or weakness of global economies
accordingly.
While yen crosses are mainly speculative plays based on risk aversion
or lack of it within the financial markets, commodity currencies offer
a look not only at rate differential, but also capture fundamental
differences in their economies and global economic zones that they are
part of. Euro vs. Aussie dollar offers a trade in a cross that
represents Europe, an “old world” very much ingrained in Western
culture, and Australia, which is located in close proximity to China,
India, Indonesia and Japan and benefits from the insatiable appetite
of those countries for commodities. Prior to the implosion of global
equity markets in September/October 2008, EUR/AUD was trading above
2.10, which means it took more than two Australian dollars to buy one
euro. In spite of 350 basis points in interest rates in favor of
Aussie, the emergence of Asia as an economic behemoth, and the less
complicated political structure, demographic and economic advantages
of Australia over the quite fragmented, complicated Eurozone’s bloc of
countries, the market was pricing that cross at least 20% higher than
it deserved. As the crisis hit Europe and the United States greatly,
its influence on Asia and Australia was much tamer, and short-term
interest rates that eventually went to zero in the U.S. and 1% in
Europe stopped at 3.5% in Australia.
The Reserve Bank of Australia was the first major central bank to
raise interest rates. That is why EUR/AUD was trading at 1.60 at the
beginning of 2010, and with the Greece/Portugal/Spain/Ireland
sovereign crisis in full bloom, the same cross is presently priced at
1.49 (see “Sliding euro,”).
These examples show that diversification and the ability to trade many
other crosses in addition to majors can offer tremendous opportunities
for profit. However, one has to understand that trading risks may be
higher, costs of transactions may be greater and there may be somewhat
different volatility, which translates into wider daily trading
bands.Every trader needs to work these factors into their model. If
you are trading a short-term strategy that assumes you can get in and
out of the market with a one or two pip spread, you can’t simply go
from trading the EUR/USD to the EUR/AUD.
From a trader’s perspective, it may mean establishing smaller
positions, wider stops and a more patient approach, because of all of
the above. Trading all of the currencies requires complete
understanding of the risks involved and the fundamental and technical
factors driving forex markets. But there are benefits from widening
your horizons, especially in currencies, where the fundamentals of the
dollar can overwhelm the fundamentals of the specific currency you are
looking at.
Marek D. Chelkowski is a CTA based in Meridian, Idaho. He is a
discretionary trader who exclusively trades spot currency markets.
http://www.futuresmag.com/Issues/2010/April-2010/Pages/How-to-trade-forex-cross-pairs.aspx
US-China currency debacle continues Source: Global Times [01:03 March
25 2010] Comments By Liu Dong
With the US economy still in mild recovery and the unemployment rate
still high, the country's easy monetary policy is expected to be
continuously operational for an extended period, a US high-ranking
official noted Wednesday.
"The US economy is emerging from a very deep recession," but the
"underlying tendencies for growth would likely to be much more
modest," which necessitates a maintenance of the easy policy for at
least six months, Charles Evans, president and chief executive of the
Federal Reserve Bank of Chicago, said at a press conference in Beijing
talking about current American monetary policy.
"Such an accommodative policy is currently appropriate," San Francisco
Federal Reserve President Janet Yellen noted Tuesday, confirming the
Fed's pledge not to tighten monetary policy, Reuters reported.
"The US' easy monetary policy would negatively affect China's economic
and financial and macroeconomic policies," He Maochun, director of the
Research Center of Economy and Diplomacy at Tsinghua University, said.
"The loose monetary policy weakens the dollar and undermines dollar-
denominated assets to attract short-term international capital, which
drove enormous volumes of ‘hot money' into China," said Ding Dou, an
economics expert at Peking University.
"The dollar devaluation, compounded by excess liquidity, heightened
pressure to appreciate the yuan," Ding said.
"Nevertheless, a sharp rise of the yuan would wreak devastating blows
on export-oriented enterprises and cause massive layoffs, and
subsequently cause incalculable damage to the overall operation of
China's economy,"He Maochun said.
"It is also hard to find an equilibrium exchange rate point and to
define an appropriate level concerning the appreciation margin," He
added.
The Chinese authorities' denial of currency undervaluation has fueled
an ongoing spat between Beijing and Washington.
The irreconcilable interests of both sides ignited spiraling
contention, and "important negotiations" would be initiated in the
coming weeks, US Ambassador to China Jon Huntsman said in an address
at Tsinghua University last Thursday.
Evans was commissioned, at this critical moment, to conduct an
"assessment of how the two economies interact," and devise policies
that "accommodate" the situation.
In a cavalcade of governmental interaction, Zhong Shan, vice commerce
minister, was scheduled to depart today on a visit to the US, and Vice
Premier Wang Qishan, who is in charge of China-US Strategic Economic
Dialogue, met with former US Secretary of State Condoleezza Rice on
March 22.
Premier Wen Jiabao highlighted Monday the significance of the May
dialogue at the China Development Forum. "The mechanism constitutes a
vital opportunity to resolve the friction and problem, and China
prioritizes its vital role."
Huntsman noted that "this year we are putting the relationship to the
test in trying to take it to a new level," and disputes would enable
the two "concentrated … on getting to know one another better and
defining our priorities together."
"The US and China, two heavyweights vital in shaping the world order,
should not be antagonizing rivals, but instead endeavor to forge a
pivot to tackle global issues," He Maochun said.
http://business.globaltimes.cn/world/2010-03/515770.html
Leadership
Why The Yuan Can't Become The World's Reserve Currency
Ignacio de la Torre, 03.24.10, 01:25 PM EDT
Far too many things would have to go right in China and wrong in the
U.S.
When the country emerged as the world's superpower, after a protracted
confrontation, it paid a high price. It had formerly exported capital
and had its public spending well under control; now it ran extremely
dangerous trade deficits and could sustain its funding only by
massively selling bonds to its neighbor across an ocean to the west.
That neighbor built up large trade surpluses as it accumulated those
bonds. No one thought it could ever topple the superpower from its
place as world leader. They certainly didn't imagine that the bond-
buying nation would go on to make its money the world's reserve
currency. But that is exactly what happened.
The U.S. and China today? No. Great Britain and the U.S. in 1918. The
pound went into an inexorable decline after World War I that ended
with the dollar taking over when the Bretton Woods agreements were
worked out after World War II.
The consulting firm McKinsey recently published a study titled, "Will
China's Currency Replace the Dollar as the World Reserve Currency?"
It's a question many people have been asking.
There are several strong-sounding arguments in favor of the
proposition. (1) America's trade deficit has been beginning to seem
unsustainable, and shifting demographics mean it's only going to get
worse. (2) The U.S. has incurred trade deficits repeatedly for far
longer than can be explained by its having the world reserve currency,
and the Chinese Central Bank has long been accumulating reserves,
thanks to its trade surpluses. (3) The Federal Reserve's lax monetary
policy is further weakening the dollar and threatening to trigger
inflation. (4) The U.S.'s enormous and growing foreign debt might
encourage the use of inflation to devalue that debt. (5) Furthermore
the subprime crisis has profoundly harmed American financial systems
and consumers.
But there are at least nine even stronger counterarguments. (1) The
Chinese capital markets would need to have far more liquidity and
transparency before investors would consider using the renminbi
(China's official currency, whose unit of denomination is the yuan) as
a world reserve currency, and there's no sign of that coming about.
(2) The U.S. has never, in its 234 years, missed a payment on its
debt. Right at the dawn of the republic, during the War for
Independence, Congress concluded that nonpayment of debt would be
national humiliation and must never happen. (Argentina's congress took
the opposite route when it approved the nonpayment of debts in 2002,
to the applause of all the legislators present.) (3) Because China is
still a communist dictatorship, its fiscal and monetary policies won't
respond to market forces the way a democracy's do, and that creates a
strong element of uncertainty. (4) China is facing its own demographic
time bomb as a result of laws introduced in the 1980s that limit the
number of births. (5) China's economic growth is based on the export
of low-added-value products and a controlled rate of exchange, which
give it an unbalanced economy with a low level of consumerism. (6)
China is effectively two countries, one urban and developed the other
rural and undeveloped, and the divide between them could lead to
social instability that could threaten the country's economy and
currency. (7) The Chinese economy depends too heavily on exports to
one nation, the U.S., and (8) has structural weaknesses because of a
lack of supply of raw materials. (9) The U.S. economy relies on
innovation and competition to generate productivity; without those
free-market forces China's medium-term competitiveness is more
uncertain.
The pound didn't stop being the world reserve currency overnight. The
process started around 1870 and was completed in 1945. For the yuan to
take over from the dollar, the Chinese would have to do a great many
things extremely well, and the Americans would have to do a great many
things very badly. It just does not make sense to bet on that
happening. The dollar will continue to be the world reserve currency
because, among other reasons, there is no valid alternative,
especially now that the euro has been rocked by Greece's crisis.
Related Stories
Krugman Is Still All Wrong About The Yuan
http://www.forbes.com/2010/03/16/krugman-currency-yuan-leadership-citizenship-rein.html?partner=relatedstoriesbox
China Will Lead The Way
http://www.forbes.com/2010/03/08/asia-financial-capital-markets-economy-china-currency.html?partner=relatedstoriesbox
The Ascent Of Asia
http://www.forbes.com/2010/03/08/asia-supply-demand-markets-economy-china-japan.html?partner=relatedstoriesbox
Chinese Currency Set To Rise
http://www.forbes.com/2010/03/22/china-currency-rise-markets-rebuilding-global-markets-lam.html?partner=relatedstoriesbox
Renminbi Roller Coaster
http://www.forbes.com/2010/02/18/renminbi-beijing-china-currency-opinions-columnists-gordon-g-chang.html?partner=relatedstoriesbox
Napoleon is reported to have said "Let China sleep. For when China
wakes, it will shake the world." What Napoleon did not know was that
in 1800 China represented 50% of the world's gross domestic product--
and today it represents 10%, at market prices. China depends far more
on the U.S. than the U.S. does on China.
Many generations will come and go before there is any chance that
China's money will become the world reserve currency. It will probably
never happen.
Ignacio de la Torre is a professor and academic director of the master
in finance programs at IE Business School, in Madrid.
http://www.forbes.com/2010/03/24/yuan-renminbi-currency-leadership-citizenship-world.html?boxes=leadershipchannellatest
Overnight Interest Rate Update 03.24.10 Wed, 24 Mar 2010 05:08 GMT
European Manufacturing Growth to Slow for First Time in Over a Year
Wed, 24 Mar 2010 03:51 GMT
Japan's Trade Flow Trends Favor Dollar Gains vs Euro, Pound Wed, 24
Mar 2010 02:23 GMT
fx options forecastArticleUS Dollar Forecast to Rally Further on Shift
in FX Options Wednesday, 24 March 2010 18:30 GMT | Written by David
Rodriguez Previous Articles Print RSS Text Size Text Size
ToggleMar, 17 US Dollar May Fall Further Against Euro, Australian
DollarMar, 10 Euro Forecast to Recover Against US Dollar on Options
SentimentMar, 03 US Dollar at Risk of Further Declines On One-Sided
PositioningFeb, 24 US Dollar Forecast to Gain, but Watch for
CorrectionsFeb, 17 US Dollar to Decline on Extreme Forex
PositioningFeb, 10 US Dollar at Risk of Pullback Within Longer-Term
RallyFeb, 04 US Dollar Forecast Remains Aggressively Bullish on Forex
OptionsJan, 27 US Dollar Forecast Bullish on One-Sided Futures
PositioningJan, 21 US Dollar to Continue Appreciating According to
Options, Futures DataJan, 13 US Dollar May Lose Further According to
Options SentimentJan, 06 US Dollar Forecast Turns Short-Term Bearish
on Sentiment ExtremesDec, 30 US Dollar Forecast to Pull Back on Forex
Options SentimentDec, 23 US Dollar Rallies May Slow on Forex Options
SentimentDec, 10 Forex Futures and Options Point to US Dollar
RecoveryNov, 17 US Dollar Forecast to Trade in Choppy Range on Unclear
SentimentNov, 02 Forex Options Point to a Slowdown in US Dollar
GainsOct, 26 Forex Options and Futures Support Calls for US Dollar
Bottom, Euro TopOct, 17 Forex Options and Futures Point to British
Pound, US Dollar Recovery
A significant US Dollar bounce has unsurprisingly coincided with a
jump in forex options volatility expectations, and it seems that FX
markets are reaching an important juncture. The overbought US currency
was, in our opinion, at clear risk for short-term corrections against
the Euro on extremely one-sided sentiment.
A significant US Dollar bounce has unsurprisingly coincided with a
jump in forex options volatility expectations, and it seems that FX
markets are reaching an important juncture. The overbought US currency
was, in our opinion, at clear risk for short-term corrections against
the Euro on extremely one-sided sentiment. Yet markets have proven
that they are yet willing to buy further into Greenback strength, and
we have little reason to fade the Dollar’s impressive momentum. Look
for further US Dollar rallies against the Euro and other important
forex counterparts.
Read a how-to guide on understanding our Forex Options Weekly Forecast
report or view a video on the same. Discuss outlook for individual
currency pairs in our forex forums.
DailyFX Volatility Indices
Euro / US Dollar Options Analysis
A dramatic turnaround in Forex Options Risk Reversals suggests that
Euro/US Dollar declines may continue into the near future, leaving
momentum firmly to the downside. Last week we said that depressed
forex options volatility expectations implied that the EURUSD would
likely stick to its range and bounce off its lows. Yet the sudden jump
in realized and implied vols leaves risks for further currency moves.
As far as futures positioning is concerned, Non-Commercials still
remain heavily net-short EUR/USD but less so than last week—leaving
space for further USD gains.
British Pound / US Dollar Options Analysis
Net speculative positioning on the British Pound is quite similar to
that of the Euro, with Non-Commercial traders very much net-short the
GBP/USD. Similar one-sided extremes in forex options risk reversals
suggest that the GBP/USD may continue to decline through upcoming
trade, and momentum remains firmly to the downside. Watch for further
GBP declines through near-term trading.
US Dollar / Japanese Yen Options Analysis
Forex options market risk reversals on the US Dollar/Japanese Yen pair
are once again at bullish extremes, underlining the strong shift to
sell the JPY. There are two ways to interpret the current FX Options
sentiment extremes: the USDJPY is either at risk for pullback or can
remain overbought for longer. Given the severity of the recent move,
we think that short-term risks remain to the topside. Broader US
Dollar momentum may just be enough to push the USDJPY through upcoming
trade.
US Dollar / Canadian Dollar Options Analysis
Forex futures traders remain very aggressively long the Canadian
Dollar against the US Dollar (short USDCAD), but a substantial shift
in FX Options risk reversals show that many are headed for the exits.
Any bouts of short-covering could easily force further USDCAD
pullbacks and it seems now may be a good time to exit USDCAD short
positions. It is perhaps early to call for an outright reversal, but
further US Dollar strength could easily force the correction many have
been waiting for.
US Dollar / Swiss Franc Options Analysis
US Dollar sentiment against the Swiss Franc is fairly mixed at the
moment, as futures traders remain fairly net-long USDCHF while options
traders bet on weakness. Such relative indecision makes it difficult
to take a strong stance on the currency pair, but our general forecast
for US Dollar strength leaves a modestly bullish bias for the USDCHF.
Australian Dollar / US Dollar Options Analysis
The Australian Dollar remains very heavily overbought by Forex Futures
Non-Commercial traders, but a recent pullback in risk reversals
suggests that this could be the start of a bigger pullback. Of course,
we have been caught short at exactly the wrong times on the AUDUSD and
we admittedly hesitate to make a more brazen prediction. Yet if
broader US Dollar strength holds up/continues, any AUD-long covering
could force fairly substantive AUDUSD pullbacks.
New Zealand Dollar / US Dollar Options Analysis
New Zealand Dollar Risk Reversals show that many traders have
aggressively hedged against further NZDUSD strength, and our short-
term bias subsequently remains to the downside. Unlike the AUDUSD,
however, Futures positioning is not overwhelmingly long the New
Zealand Dollar. This leaves perhaps less scope for substantial NZD
pullbacks on long-covering, but our bias nonetheless favors further
losses.
Written by David Rodríguez, Quantitative Strategist for DailyFX.com,
***@dailyfx.com
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US Dollar May Fall Further Against Euro, Australian Dollar
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Euro Forecast to Recover Against US Dollar on Options Sentiment
http://www.dailyfx.com/forex/technical/article/fx_options_forecast/2010-03-10-2247-Euro_Forecast_to_Recover_Against.html
US Dollar at Risk of Further Declines On One-Sided Positioning
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DailyFX - US Dollar Forecast to Rally Further on Shift in FX Options
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FOREX-Dollar rises broadly; Portugal downgrade hurts euro
Wed Mar 24, 2010 1:34pm EDT
* Dollar rallies broadly; euro falls to 10-month low
Currencies
* Fitch Ratings cuts Portugal's sovereign rating
* Dollar index hits highest since May 2009
* Swiss franc climbs to record high against the euro (Recasts, updates
prices, adds quote)
NEW YORK, March 24 (Reuters) - The U.S. dollar rose across the board
on Wednesday, pushing the euro to a 10-month low after a rating
downgrade for Portugal added to worries about debt levels and growth
in the euro zone's smaller countries.
Fitch Ratings lowered Portugal's sovereign credit rating to AA-minus
from AA, with a negative outlook. For details, see [ID:nWLB0770]
An already weak euro fell to the day's low of $1.3329, according to
Reuters data, its lowest since early May 2009.
Traders said a series of stop-loss orders had been hit near the
$1.3440/30 area in Asia and later in Europe, which prompted further
selling.
In the United States, economic reports on new orders for manufactured
goods and housing data were mixed, although analysts said the
lackluster figures would not prevent investors from buying more
dollars. [ID:nN2396707] and [ID:nN2396501]
"Sovereign credit worries in Europe and Japan are leading to some
general risk aversion," said Michael Malpede, a market analyst at Easy
Forex in Chicago.
In mid-afternoon trading in New York, the euro was down 1.2 percent at
$1.3337 EUR=. It was the biggest one-day move since Feb. 17.
Against the yen, the dollar was 1.8 percent higher at 92.08 yen JPY=
after touching a session high of 92.23 yen.
Michael Woolfolk, a senior currency strategist at BNY Mellon in New
York, said the U.S. data was taking a back seat to general,
speculative buying of the U.S. dollar after euro-dollar trades had a
big technical breakdown overnight.
The downgrade of Portugal was a good excuse to keep selling euros,
according to Woolfolk.
"This may be short-lived, but I think we could get to 1.30 in euro-
dollar by the end of the week," he said. "A move to 1.25 would
probably require a more negative fundamental story on the euro zone
and Greece in particular, but such a move can't be discounted
completely."
EU SUMMIT
The market will keep a close eye on a European Union summit on
Thursday and Friday after Germany signaled for the first time that it
may accept European financial aid for Greece as a last resort.
But Germany pegged its support to several conditions, including the
need for the International Monetary Fund to make a "substantial
contribution." [ID:nLDE62M130]
"While the newsflow on the situation will ebb and flow, the overall
conclusion is this: at no other time since the advent of the euro has
the possibility for a break-up been this high," said Andrew Busch,
global FX strategist at BMO Capital Markets in Chicago in a note to
clients. "It means risk-adverse selling will continue until the
European Union and IMF can stabilize the debt situation and shift the
narrative to a positive tone."
Investors flocked to the perceived safety of the U.S. currency,
pushing the dollar to its highest since May last year against a basket
of currencies. The dollar index, a calculated measure that tracks the
performance of the greenback versus six other major currencies, was up
1.2 percent at 81.857 .DXY.
The greenback hit a two-week peak against the Swiss franc at 1.0716
CHF=, according to Reuters data. The euro traded flat versus the Swiss
franc at 1.4270 francs EURCHF= after hitting a record low at 1.4233,
according to Reuters data.
Swiss National Bank President Phillip Hildebrand said on Tuesday the
central bank would keep fighting excessive franc appreciation. But
traders expect it to shy away from large-scale intervention as the
economy recovers. [ID:nLDE62M0D9] (Reporting by Nick Olivari and
Vivianne Rodrigues; Additional reporting by Steven C. Johnson in New
York and Tamawa Desai in London; Editing by Dan Grebler)
http://www.reuters.com/article/idUSN2419483720100324?type=usDollarRpt
Forex: Budget breaks sterling, down 100 pips
Posted 3/24/2010 12:17 PM ET by from FXstreet.com
FXstreet.com (London) - Sterling has shed over 100 pips today as
political worries and concerns over the ability of Britain to reduce
its deficit weighed on the currency. It was a gradual downtrend for
cable, first pushed by a general anti-europe approach to risk taking,
precipitated by Portugals downgraded to AA- status by ratings agency
Fitch today.
Outlook has continued to worsen for the pounds as twin effects of the
budget annoucement weighed. The pre-budget proposal firstly served as
a stark reminder to market players of the deficit problems in Britain,
and secondly showed 'solutions' are perceived as unrealisitc and
inactionable. Pair quotes at 1.4899, well under the 1.5 key support ,
but clear of intraday lows of 1.4875.
http://www.nasdaq.com/newscontent/20100324/forex-budget-breaks-sterling-down-100-pips.aspx?storyid=20100324_ee8519c3-4f1e-4fa5-9437-a595aff56f86_fxstreet.com
Forex - Dollar extends gains vs. Swissy after U.S. goods
data2010-03-24 14:00:32 GMT (Forex Pros)
Forex Pros – The U.S. dollar extended gains versus the Swiss franc on
Wednesday, hitting a 2-week high after official data showed that new
orders for U.S. durable goods rose for the third month running in
February.
USD/CHF surged to 1.0715 during European afternoon trade, its highest
rate since March 11; the pair subsequently consolidated around 1.0687,
advancing 1.06%.
The pair was likely to find resistance at 1.0898, the high of Feb. 19,
and support at 1.0131, the low of Jan. 11.
Earlier in the day, the U.S. Census Bureau said there was a 0.9%
increase in new orders for manufactured durable goods orders in
February, up from a drop of 1% in January. Economists had expected a
rise of only 0.5%.
Meanwhile, the Swissy also bounced after hitting a fresh all-time low
against the euro on Wednesday at 1.4232; EUR/CHF later reached 1.4279,
still gaining 0.03%.
Also Wednesday, Thomas Jordan, the vice chairman of the Swiss National
Bank's governing board, was set to deliver a speech in Bern titled,
"Banking regulation: What went wrong? What will be better?"
USD/CHF USD/CHF
1.0734
Time: Mar 24, 21:27:02 GMT
Members' Sentiments:80% 20%
BullishBearishSummary:
Moving Averages: Buy (12) Sell (0)
Indicators: Buy (7) Sell (0)
S3 S2 S1 Pivot Points R1 R2 R3
1.0717 1.0722 1.0728 1.0733 1.0739 1.0744 1.075
Timeframe: 5 Minutes 10 Minutes Hourly Daily
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Daily GVI Forex Forex View- USD Spiking Higher
Global-View.com , Global-View.com
Published 03/24/2010 - 10:07 a.m. EST
USD Spiking Higher
Forex trading has gotten off to an active start on Wednesday as the
EURUSD has broken decisively through the 1.3400 line, and reportedly
taken out DNT options at 1.3400 along the way. We note once again the
focus of the market is being very much driven by big figures.
The EURUSD continues to be weighed down by the Greek debt situation.
Investors today seem very much concerned that Germany and France will
be relying on the IMF to bail out Greece. Someone said that Germany is
standing by with hands in its pockets. For her part, Chancellor Merkel
faces close regional elections in the next two weeks and a Greece
bailout is very unpopular. There also is the question whether aid to
Greece opens the door to assistance for a number of even larger
economies. The Maastricht Treaty, which served as the basis for the
European currency union was supposed to have protected Germany from
what is happening at the present time. That question has major
implications for the political underpinnings of the common currency,
especially for those diversifying permanent forex reserves into the
unit.
Another key development has been word from Nikkei news that Japanese
lifers are expected to start to buy USD to invest in foreign
instruments after the turn of the fiscal year next week. The USDJPY
has tested above the 91.00 level as the markets set up for these
flows. We have noted recently that long USDJPY has been the flavor of
the month for hedge funds.
Flash EZ PMI data and German IFO data were better than expected today.
In North America, Weekly Mortgage statistics are due shortly. Advance
Durable Goods orders are due. Later, new Homes Sales will be released.
Weekly crude figures are due. Later the U.S. Treasury will hold a 5-yr
bond auction.
EUR/USD is sharply weaker. The equity correlation trade has been
working off and on. The ECB has been backing away gradually from
extraordinary policy. Worries about the weaker Eurozone economies have
been a weight off and on.
EUR/CHF is steady. USD/CHF is higher. The SNB continues to signal that
it will continue to prevent excessive CHF gains against the EUR. The
SNB periodically has been intervening in the EURCHF cross.
USD/JPY is higher. EUR/JPY is lower. The Japanese government and BOJ
have reconciling their differences and are pursuing ant-deflationary
policies..
GBP/USD is down and the EUR/GBP is lower. Political uncertainty and
mixed data have been triggering instability in the GBP.
The CAD is weaker. The Bank of Canada has increasingly been turning
less dovish as the economy stabilizes. Canada could be one of the
early major economies to raise interest rates, but not immediately.
The AUD and NZD are lower. Risk trades keep cycling in and out. The
RBA is likely to hike again in 2Q10. The RBNZ has signaled a rate hike
by mid-year.
Gold and Oil are down. Gold, oil, equities and the commodity
currencies are all carry trades. Gold is another anti-dollar.
Far East equity markets closed better. European bourses are up. U.S.
equities are mixed.
The U.S. 10-yr note is 3.71%, +2 bp. Fixed income markets are
vulnerable as they consider the prospect of an end to excessive Fed
ease and large borrowing needs by the the U.S. government.
Nevertheless. Fed Funds should remain low for an extended time period.
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http://www.forexhound.com/article/Technicals/Daily_Reports/Daily_GVI_Forex_Forex_View_USD_Spiking_Higher/193825
SOURCE: Interbank FX
Mar 24, 2010 16:00 ET
Interbank FX Adds Forex Bridge Product to Private Label OfferingsSALT
LAKE CITY, UT--(Marketwire - March 24, 2010) - Interbank FX,
(www.ibfx.com), a global provider of online off-exchange retail
foreign currency (Forex/FX) trading technology and services, is now
offering an exclusive FX bridge product available to banks, providing
a direct link between our MT4 trading platform and a liquidity
provider. Interbank FX's bridge software is designed to deliver FX
prices and provide trade execution for banks that utilize the
MetaTrader platform offered by MetaQuotes Software Corporation.
Using our elite Order Management System (OMS), Interbank FX equips
banks with integration of liquidity into the MT4 platform and provides
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"We've developed our unique bridge solution to boost the capabilities
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Serving more than 35,000 clients from more than 140 countries around
the world, Interbank FX LLC is regulated as a member of the National
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Trading in the off-exchange retail foreign currency market is one of
the riskiest forms of investment available. Full risk disclaimer can
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PR Contact:
Abigail DeGraff
Interbank FX
Email Contact
(801) 930-6833
http://www.marketwire.com/press-release/Interbank-FX-Adds-Forex-Bridge-Product-to-Private-Label-Offerings-1137460.htm
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