Forex Investment and Currency Trading

USD is broadly stronger overnight, reversing roughly half of yesterday’s losses against most of the other majors.  There is no clear catalyst for the move, though stronger equity markets are probably helping as is evident in JPY underperformance. Most Asian stock markets ended higher, European markets are generally up around ½-1% and futures point to a rebound in US markets at the open (DJI +56pts). For the day ahead, there are no key US data, with Canadian June retail sales the only event risk (see below).
GBP/USD fell to a low of 1.8570, just above the two year low seen late [...]

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GBP/USD selling paved the way for further broad USD strength early in the London session today (see GBP/USD below), though USD has subsequently retraced gains to stand only marginally higher than the North American close against most of the majors. JPY and CAD are outperforming. Weaker commodity prices are again supporting USD, with crude trading to a low of USD111.64/bl and gold back below USD800/oz (sport USD790). Global stocks are taking their cues from the weak US close, with losses of 1-2% across Asian and European markets. The July US PPI and housing starts are the main US data risks [...]

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USD began this week on the back foot relinquishing most of Friday’s gains in a move that coincided with a bounce in gold and oil prices. Gold edged up 1% off the lows overnight, pushing back up to around USD800/ozt, while crude oil was also better bid, rallying up to around USD115/bl following an article in the WSJ which quoted Iran’s OPEC governor as saying the oil cartel may decide to cut oil production at its September meeting. The London open saw a moderate correction to these moves with oil falling back to around USD114/bl, gold dipping to USD797/ozt, and [...]

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Rollovers
A rollover is the process whereby the settlement of an open trade is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies.
In the spot FOREX market, trades must be settled within two business days. For example, if a trader sells a certain number of currency units on Wednesday, he must deliver an equivalent number of units on Friday. Yet currency trading systems may allow for a rollover, with which open positions can be swapped forward to the next settlement date (giving an extension of two additional business [...]

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