Wednesday, January 04, 2006

Reversal of fortunes

2006 begins with a little retracement in the dollar and a continuing og the chase for yield with Emerging Markets. After the Fed minutes revieled that the tightening cycle might be coming to an end dollar futures, followed by the rest of the world, rallied. My take on the minutes is slightly different. I think that a few (2 possible 3 ) more rate hikes are planned. After that it will be a numbers game. I am looking for a strong employment number on friday and with it will come a big selloff in futures followed by a rally in the dollar. If the number is neutral to weak look for the dollar to come under additional pressure with lower global rates fir the next week or so.

These are the FX Trading Ideas for today.



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