Forex Investment and Currency Trading

The Fed announced details of its agency mortgage-backed security (MBS) purchase program after New York markets closed Tuesday. It will purchase up to $500bn in agency MBS by the end of Q2 09, and purchases will be made on the Fed’s behalf by BlackRock, Goldman Sachs, PIMCO, and Wellington. They will employ a “passive buy and hold investment strategy” with the goal of providing “support to mortgage and housing markets and to foster improved conditions in financial markets more generally.” The purchases “will be financed through the creation of additional bank reserves,” which is to say the program will lead [...]

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Initial claims for unemployment insurance dropped 94k to 492k in the week ending December 27, below consensus expectations for a more moderate decrease. Earlier-than-usual seasonal auto plant shutdowns have likely contributed volatility to the claims readings in recent weeks: the 4-week moving average edged down to 552k from 558k a week prior, but it is still above readings in the first half of the month. Continuing claims for the week ending December 20 jumped 140k to 4506k, and the insured unemployment rate ticked up to 3.4%, exceeding the peaks in the 1990 recession and the highest reading since 1983. Thus, [...]

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Happy New Year and best wishes for 2009.
Year 2008 - good riddance after a poor year for stocks (the worst year since the 1930s in the US), a huge correction in commodities and a whole lot of volatility in FX.
The CAD has a middling sort of year, racking up gains against its “Anglo” peers – GBP, AUD and NZD – as well as some of the top tier EM currencies, such as the ZAR, KRW and BRL. The CAD has lost a huge amount of ground versus the JPY (the top performer amongst the major currencies this year), the CHF [...]

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A number of euro area central bank officials have been quoted on the wires in recent days. Of those comments since Christmas, perhaps the most significant statement was in ECB Vice-President Papademos’s interview with the Greek newspaper Kathimerini, where Mr Papademos is reported to have said that “The risks of price instability appear to be balanced, but with indications that prices are on a downward trend…If that assessment is upheld, then it indicates further loosening of monetary policy”. Though that statement offers no hint on the timing of any policy easing, it is, in view, significant that in the wake of the 18 [...]

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