Forex Investment and Currency Trading

Global  deleveraging  is  affecting  emerging markets  in  three  ways.  First, countries with substantial outstanding net external liabilities have been facing outflows from foreign investors repatriating their assets. Second, in the absence of abundant G10 capital, it will be for current account deficit countries to find funding for their external positions. Third, the higher cost of external funding is posing downside risks to local growth.
Eastern European economies are among the most exposed to global deleveraging. Asia is the
least exposed, yet there are intra-regional differences, with places such as Korea, India, Indonesia more exposed relative to China, Malaysia and Singapore.
Finally, Latin America [...]

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Russia The CBR allow the trading band of the ruble against the USD-EUR basket to widen on Tuesday morning, implying a 1% devaluation. Given the sharp drop in oil prices and large capital outflows, the currency had come under strong pressure, forcing the CBR into large-scale interventions. Nevertheless, the move was a surprise to some extent, given that cash flows going forward would have allowed the CBR to defend the ruble well into 2009. However, the decision is good news for policymaking in Russia because it likely implies a further step towards a floating exchange rate that would allow for [...]

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Not a lot of activity seen today. $Asia started biddish but we did not see any notable rush to buy US Dollars. Stock markets mostly in the black.
Ranges before London open: $JPY: 101.41-102.18; EUR$: 1.3401-1.3498; EURYEN: 135.93-137.89; GBP$: 1.7290-1.7397 $CHF: 1.1320-1.1370 AUD$: 0.6860-0.7013; NZD$: 0.6060-0.6170 A very quiet start to the week in Asia with almost no new breaking news out over the weekend. In relation to recent Asian Mondays the trading session could be described as lacklustre. Recent additional rate cuts from some Australian banks outside of the RBA move could mean that the RBA cuts by less than [...]

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Ok, so perhaps the Scandie moves pale in comparison to the USDZAR move, but we still witnessed 3 standard deviation moves across the board in the scandies yesterday with much of it coming in the last 2 hours of trading in New York.  Theoretically, we would expect to see a move like that 2 to 3 times a year - tops.  To put the moves into trading perspective, I paid a 14 vol yesterday afternoon for a Eursek option structure that I paid a 7 vol for a mere two weeks ago, and despite that increase in premium, the option [...]

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