Forex Investment and Currency Trading

The RBA has intervened on several occasions in recent weeks as AUD/USD threatened to trade below 0.60 raising speculation that 0.60 is the “line in the sand”. Though recent intervention efforts have been successful in halting a decline in AUD/USD through 0.60, an eventual break lower is a key risk on renewed risk aversion. Such a break could extend to 0.55.
The RBA undertakes transactions in foreign exchange markets for several reasons. The least frequent, but most prominent, are those to influence AUD - intervention. This is distinct from the building (or drawing down) of foreign exchange reserves associated with the [...]

[Read more →]

NZD (and to a lesser degree the AUD) has had a tendency to lead moves in Majors (no, not the JPY) vs. USD lately and so NZDUSD bounce off 0.5793 low worth taking note of.
Granted, RSI’s are not as oversold as they were in previous mini-rallies (Oct, Sep, Aug ’08) but daily readings are slipping
Ability to hold 0.5800 next couple days could pave the way for another mini rally higher though likely limited to 0.6200-6260 highs
Remain USD bulls but see this as potential chance to sell into a corrective rally
NZD pullback of this nature also likely to coincide with some [...]

[Read more →]

Current sentiment for the A$ is very bearish…
The overall atmospherics remain downbeat for the AUD. As highlighted by the chart across, commodity prices have moved sharply against the currency and we could add the yield spread and domestic data to this picture. However, it must be asked how much of this bad news is already priced in? Since its peak in mid July, the AUD has fallen by close to 35% in its most violent correction since the currency was floated in December 1983. There seem to be lots of other compelling reasons to own AUD here - funding markets [...]

[Read more →]

Risk Aversion Provides a Negative Backdrop for NOK and SEK
While there has been much focus on the recent sudden weakness of the NOK and SEK since the beginning of September, this weakness comes after relative stability since the beginning of the credit crunch compared to the other majors which have recorded far greater shifts stronger or weaker on a broad TWI basis. That said, it appears that NOK and SEK are at least starting to catch up. Indeed on the EUR crosses both NOK and SEK have reached multi-year highs comparable with previous crises.
The rapid weakening of both currencies coincides [...]

[Read more →]