Monday, May 09, 2005

Strong Employment number

Fridays employment number signals to me that the Fed has been right all along. Growth is stronger then everyone believed. Also Gas prices (which I have discussed previously) have been coming off (I know not fast enough). That puts money right back into the consumers pocket.

I am looking for the Euro to continue under pressure (previous posts look for 1.2200). Also dollar rates ARE GOING HIGHER !!!!

Higher Yielding currencies which I am currently long of have been struggling abit. I will continue to caustiously hold these postions.

U.K. numbers today showed weaker growth and higher inflation. Not a good mix. The currency has taken a beating in the last few days (as has my yield portfolio) but I maintain that under this senario rates will not come lower just moderate. Stay long GBP and Long Short Sterling against USD Futures.

These are my FX Trading Ideas for today.

Good Luck to all.

Friday, May 06, 2005

Employment number.....

All eyes on the employment number......I have squared up all of my outrite positions, except for Mexico. No sense taking needless risk before a big number like employment.

Canadian employment came in better then expected, but the currency remained little changed.

Good Luck to all

Thursday, May 05, 2005

Pressure continues on China ???

Japan pressed China to reform the Yuan currency peg but stated that "flexible exchange rates were not a panacea for all imbalances threatening the global economy" according to reuters. China also stated that any FX move would be difficult when intense speculation was on the Yuan.

So what does that mean for the markets ? SELL DOLLAR ASIA ! Where there is smoke there is fire. The pressure will remain on dollar asia until something happens. Sure there will be pullbacks but until China moves on its currency (and a move is coming...I think in Oct) why would any FX trader risk being long dollars. I certainly will not. I will be short or neutral NOT LONG.

It seems to me that the market is looking for a slowdown in the U.S. economy. I am not so sure. I am looking at this as a "slow patch". Time will tell but it seems the FED believes the same as me and I am willing to bet with Mr Greenspan for now.

So to sum up ....Be short USD futures (I like being long Short Sterling against them).
Short Dollar Asia
Short Dollar Mexico
Short Forward Brazil.

These are my FX Trading Ideas for today.

Good Luck to all

Tuesday, May 03, 2005

Fed announcement today

Today at 2.15 the Fed will announce another 25 basis point hike. This is no surprise. It seems though that with these continued increases the shine is coming off of the "higher" yielding currencies. This is because rates are not rising in other countries quite as fast if at all. Tonight the RBA announces its rate decision and it is expected that there will be no change.

I still prefer staying long Aud,Nzd,Gbp against short Eur,Cad,Chf.

Also dollar Asia should remain heavy. Although I do not see any near term change in the Chinese currency, the threat is always there and as such so is the pressure.

These are my FX trading Ideas for today

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