Forex Investment and Currency Trading

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 [...]

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, [...]

Risk is “on” in a big way so far Monday, lifting the NZD to the top performance spot on the day so far while the JPY and the USD slump. Metals and crude oil prices are pushing higher in response to the pro-risk backdrop and the CAD is trying to shake off last week’s drop in form that saw it fall broadly. Cross flows are generally a little more constructive for the CAD this morning, with a couple of exceptions; one notable factor is the strong bid under AUD/CAD earlier in the session which drove the cross to a new [...]

Global markets are starting the week on a positive note. The news services are attributing this positive mood to G-20, after it mentioned that stimulus measures around the World will be maintained to ensure the economic recovery. This brought a renewed bid to risky assets. Stocks and commodity prices are higher, while the USD is lower. Also adding to the increased risk appetite is news out of China. Moody’s raised the country’s outlook to positive from stable. Non Farm Payroll data on Friday was positive due to the decent +91k revision in payrolls of the Aug-Sep period. Although the unemployment [...]