Forex Investment and Currency Trading

Risk sentiment is more positive this morning and the CAD is taking advantage of the better mood to push broadly higher, producing the second best performance among the major currencies in the overnight markets behind the NZD. Equity markets are positive in Asia and Europe and US futures indicate a strong opening this morning; investors appear a little less concerned by the UAE/Dubai World issues this morning, with Dubai World stating that it was in “constructive” talks with investors on restructuring that covered less than half its total debt. The impression is perhaps growing that the situation is a “little [...]

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The Canadian dollar is still struggling today, with risk still firmly off. If the mood doesn’t change
and the S&P 500 ends the day in negative territory, that will be the first 3-day losing streak since the dying days of October, when USD/CAD rallied into the high-1.08 area.
Last night’s speech from Bank of Canada Governor Carney did not contain anything new for the FX markets, at least not for the short-term. Carney decided that it was his turn to speak out on China’s exchange rate, after recent comments from the IMF and from US President Obama, among others. Governor Carney spent [...]

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Commodity prices have slipped back, helping lift the USD broadly. The underlying trend remains firmly against the USD on a number of fronts but it is possible perhaps that Chairman Bernanke’s comment Monday that the Fed was “attentive to the implications of changes” in the value of the USD has prompted a little more caution on the currency. These remarks do not seem to be signalled heightened Fed concern about the USD. Rather, it was a basic reiteration of the Fed’s previous comments on the matter. The Fed is only concerned about the value of the USD in as far [...]

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The PBoC’s Monetary Policy Report was released earlier today. The report indicated that the central bank will “improve the yuan exchange rate mechanism” moving forward based on capital flows and fluctuations in the major currencies. This apparently establishes a new set of criteria for determining how and when the CNY will move. At the very least, this suggests that the authorities are becoming more sensitive to the concerns that many countries are having with regard to domestic currency appreciation versus the CNY; as the USD falls and the CNY has operated under a de facto peg over the past year, [...]

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