Thursday, May 11, 2006

Markets Wobble

Brazil and Mexico markets took a bit of a hit today as Pimco came out and said that they were going to cut EM debt in thier portfolio's. This gave Usd/Brl an increased boost feeding off the bid nature of the market from yesterday. I have squared up my short dollar positions in Brazil (at the highs) Mexico (at the lows) and will need to re-examine the markets.

These markets have not been easy for me. Even with a clear trend (weaker dollar) I have been unable to make any real money. Fustrating to say the least.

These are the FX Trading Ideas for today.


Wednesday, May 10, 2006

Fed Day !!!

Today the Fed is expected to raise rates to 5.0%. I think the larger concern will be the comments. I am looking for the Fed to stress the need to fight rising inflation BUT that they expect inflation to decrease with the expected decrease inn economic activity. Therefore they will be going number to number for a while.

Mexico had very good inflation numbers yesterday. As such the currency strengthened. Also interest rates came off as the market is now looking for another cut in rates.

I maintain the positions that I initiated at the beginning of the month.

These are the FX Trading Ideas for today.


Friday, May 05, 2006

Employment and the Markets

The U.S. Employment number came out this morning slightly weaker then expected. Before the number I felt that it would have to be a VERY VERY strong number to change the direction of the Dollar. This number I believe adds to my view that the dollar will continue under pressure and the U.S. rates might be heading to a top. Of course you will have to look at each number as it comes out but it would seem to me that unless numbers continue at a strong pace (possible) we are in for at least a temporary pause. I am currently short Dollars against Mexico,Brazil,Chile,Colombia (and hopefully Argentina on Monday). I think that with a topping of U.S. rates Emerging Market economies will benifit. Bigger picture is that the dollar has been under pressure since the begining of the year (longer against Brazil). I always like to trade with the trend (and positive carry when available), so until REALLY strong numbers shake me out I will stay this way.

These are the FX Trading Ideas for today.


Monday, May 01, 2006

A New Month

After a brief break I am back and have a few firm ideas on the market.

1. The dollar will weaken against the Euro(current level 1.2620). I know this has already occurred, but I believe we are just in the early stages. After Bernake came out with the P(ause) word, market perception that Europe will outpace the U.S. in interest rate rises seems clear.
2. Sell dollars against Latam currencies. I am currently short dollars against Chile and Argentina, and I will get short against Brazil on tomorrows opening. If U.S. rates stall I believe that "yield players" will reenter the market and place the dollar under pressure in that region. Usd/Brl has moved alot already this year (2.33 to 2.08) and I look for us below 2.00 by month end.
3. Stay out of Usd/Mxn with a small bias toward a weaker dollar. No real interest in playing this currency pair with any size as I have no conviction.
4.Usd/Asia should move lower. I will keep a small bias toward a lower dollar especially in Idr and Taiwan. Stay away from Usd/Sgd as the central bank has a strangle hold on that currency.

These are the FX Trading Ideas for Today.