Forex Investment and Currency Trading

FX Implications: The S&P500 closed at 1106 on September 29, well be below the support level of 1218 that was needed to trigger a USD/CAD buy signal.
A significant inverse relationship exists between extreme monthly returns in the S&P500 and 1- & 2-day USD/CAD returns at the turn of each month. This reflects Canadian equity portfolio [...]

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AUD/JPY and the evolution of risk
AUD/JPY 1-year implied volatilities had seemed to suggest that the worst of the financial crisis was passing in the wake of the collapse of Bear Stearns in mid-March. However, as uncertainty and risk aversion flared again, it became clear that the global financial crisis was fully entering Phase IV. AUD/JPY [...]

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A very negative consensus has now formed around Hank Paulson, Ben Bernanke and TARP (Troubled Asset Relief Program)
So the first ‘pain’ trade, if that term can still apply in these cursedly illiquid times, is a risk rally
Consensus has also formed that any knee-jerk stock rally will fizzle as quickly as last Friday’s rally did. So [...]

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