Forex Investment and Currency Trading

Euro
The euro is marginally lower this morning as USD performance remains mixed.  However, as there were no major economic releases or events with many players still in the Easter holiday, moves seemed to be exaggerated by very illiquid market conditions.  A FT article about the debt-deflation dynamics in Greece, stating that the country will eventually default, did little to rattle the currency.  The current risk environment is supportive of EUR today and may allow EUR to claw back early losses. 
GBP
GBP sharply rallied in the early morning session.  Chancellor of the Exchequer Darling said “we must, must get our borrowing down,” [...]

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USDJPY has breached trend line resistance levels, but this move has been helped by a sharp decline in
EURUSD. The lower EURUSD has not only been driven by EUR specific factors such as Portugal’s downgrade by Fitch, but also by USD supportive effects coming on the back of China reporting its first trade deficit since 2004 (reported yesterday). China has focused its economic rebound on domestic demand which has been particularly supported by infrastructure investment. The shift away from export driven towards domestic demand driven growth suggests China’s currency reserve growth is running at a slower pace. The slower currency reserve [...]

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Although equity markets have stabilized in the last 24 hours, there’s still a lot of hesitation and uncertainty this morning. The China-US trade rhetoric continues, with China announcing that it’s going to bring the issue of tire tariffs before the WTO; China released data this morning showing that tire exports to the US actually declined in the first half of 2009, which it says proves that it has not been flooding the market. China has also said that it will air its concerns about protectionism at the upcoming G20 summit. This is an issue that the markets will be watching [...]

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Renewed equity market selling during the European session has set the stage for pressure on high beta FX, with the Scandinavian currencies as well as AUD and NZD under-performing against both USD and JPY. USD has once again been the major out-performer on the day with USD/JPY trading higher and continuing to support the observation that the pair has largely decoupled from moves in the equity markets and following yet more negative news on the Japanese equity market outlook. Despite continued weakness in the UK house prices, GBP has remained resilient to the recent downturn in UK data. This in [...]

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