Forex Investment and Currency Trading

It’s a US holiday and that can only mean one thing; wall to wall coverage of Warren Buffett on CNBC – again. That will not make the day any shorter for our markets and once Europe goes home in a few hours, the activity will trail off very quickly. USD/CAD be heading for another weekly gain (the third consecutive) but the momentum behind the move up in funds looks a little less convincing this week as the market has again struggled to hold gains above the 1.16 point. CAD is looking oversold on a medium term basis (and not just against [...]

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This morning, China’s Vice Foreign Minister He Yafei said he was not aware of reports that China had requested a debate about global reserve currencies at next week’s G-8 meeting in Italy, but he also flagged that Beijing expected the issue to be discussed informally. There are clear signs that China and other surplus countries are working on USD exit strategies. It is clear that such exit strategies can only work within an environment of strong global risk appetite. The IMF will have to play a key role.
This morning saw the Riksbank cutting rates by 25bps committing itself to the [...]

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Upside momentum is waning as buying fades and the Fed decision to not increase Treasury purchases last week could lead to more profit taking. In addition, market fair value model shows EUR/USD overvaluation is close to its highs over the past year. The question is whether any EUR/USD sell-off is likely to be large given that, from a technical perspective, most of the major USD crosses appear settled into well-defined ranges. That said there are several data/events this week, outlined below, which could trigger a sharp move in EUR/USD.
FOMC speakers will likely reinforce that a policy tightening is a long [...]

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The currency markets are showing little enthusiasm this morning; quiet markets may well characterize trading this week though the USD looks a tad vulnerable to extending the grinding losses seen over the past week or little more; overnight USD gains made on the back of comments from China’ central bank governor suggesting that there would be no quick move away from the USD have faded a little after the head of the Arab Monetary Fund suggested that the US’ huge debt pile and concerns about the USD’s reserve status could weigh on the currency. European news has been a little [...]

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