Forex Investment and Currency Trading

August is ending on a very cautious note, with investors preferring the sidelines and safe havens over further buying of riskier assets. Equities around the globe are under pressure, led by another sharp drop in Chinese stocks – down 6.7% on the day. Currencies are playing along and clearly reflect the risk aversion theme amid low liquidity due to summer trading and the UK banking holiday. JPY is the clear winner overnight, boosted by both risk aversion and local politics. CAD, on the other hand, is struggling to find friends with oil down, is struggling, even against its commodity peers.
JPY: [...]

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EURUSD lower in NY but supported in Asia despite EURJPY selling
EUR fell back to the 1.4300 level in the NY session on EURGBP selling and stop-losses in EURUSD, but has remained supported in Asia despite a 5% fall in Shanghai stocks and decent EURJPY selling as the yen rallied on the Japanese election results. However EURJPY is approaching the trendline support from January at 131.70, and a break of that would likely see renewed pressure on EUR.
USDJPY lower on DPJ landslide election victory
The DPJ picked up 308 seats of the 480 total, and with the support of smaller parties and [...]

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Following on yesterday’s strong investment data, the hawkish articles in the Australia press have started to roll out and have given the AUD a boost. For example, well-known RBA watcher, Alan Mitchell, wrote in the AFR that a rate hike next week is not likely, but hinted that October could mark the beginning of the tightening cycle.
It is worth noting that much of the commentary thus far has had qualifications on its calls for rate hikes - if next week’s Q2 GDP is strongly positive and if the cyclical data (especially retail sales the following week) are strong the RBA [...]

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Yesterday’s North American session started out to be pretty quiet, with equities and most currencies flat-ish on the day… until shortly after 2PM when things went ballistic for a while. Equities turned positive, and a few minutes later the USD sold off hard, sending EUR/USD a full big figure higher and USD/CHF to 1.0531, its lowest level since late December 2008, all in a matter of minutes. The story making the rounds is that the sudden move was USD/CHF driven with 3 yards being sold to pay for UBS shares, bought as part of the SNB recent share sale, and [...]

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