So, after the dust has settled from this week’s focus on BoC policy, we are left with an overnight rate that the central bank has pre-committed to keep at 0.25% until the middle of next year (providing inflation behaves) and a framework for additional policy measures should they be needed. The read between the lines though is that the central bank perhaps doesn’t think these additional credit and quantitative easing (CE/QE) initiatives will be needed, if its latest growth estimates are on the money. The CAD was under a fair amount of pressure running into this week’s BoC policy announcement [...]
Entries Tagged as 'Forex Notes'
CAD on the rise …
April 24th, 2009 · No Comments
Tags: USDCAD
Safe haven or panic button: USD/CHF
April 18th, 2009 · No Comments
The swiss franc has, or we should say had, a reputation for being a safe-haven currency. Apart from Switzerland’s historical neutrality and legendary bank secrecy laws, this reputation is largely a relic of the Cold War. At the time, fears of a European ground war between the United States and the Soviet Union meant most European financial centers could be out of business in short order. In terms of a major European currency alternative to U.S. dollars or German deutsche marks, the CHF became the safe-haven currency during times of geopolitical tensions.
There are still plenty of people in the market [...]
Tags: USD/CHF
FX Strategy - AUD-USD
March 18th, 2009 · No Comments
AUD-USD is still expected to trend higher towards 0.72+
A very slow basing pattern is under way, with 0.6245/0.6010 key support holding
Technically, clients should be small long and add on an upside break of 0.6629
The AUD-USD pullback in early March found support ahead of the critical 0.6245 area, with buyers driving spot above 0.65 again. This is still seen as part of a basing pattern, which is taking time to unfold. On a trend basis, AUD-USD is above the 20-day moving average (MA) at 0.6455, but is below the 60-day MA at 0.6629. A turn above the latter is expected over [...]
Tags: AUDUSD
GBP: Is the bear market over?
February 6th, 2009 · No Comments
EURGBP has fallen from 0.9805 to 0.8696 in just over a month, so
Was the 0.9805 high on EURGBP the peak of a long term bull market that started in May 2000 instead of a relatively minor high?
Can we see EURGBP and EURUSD trade in opposite directions thereby potentially implying an aggressive rally in GBPUSD?
The analysis here leads us to think that the answer to the questions above is YES.
The last time EURGBP fell while EURUSD and GBPUSD rallied was from May 2003 when EURGBP peaked at 0.7255. What was going on in 2003?…
The last cycle low in interest rates saw the [...]
Tags: GBPUSD