Forex Investment and Currency Trading

FX Bottom-line: During the last 3 months, CAD has struggled on the crosses with
the currency unable to benefit from still elevated commodity prices as it continues
to trade largely in line with the USD, underperforming most G10 currencies.

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Over the weekend and into yesterday the FX market dealt with the bone-chilling stories about EURUSD nearly blowing down the 1.60 door, USDJPY below 100 (first since 1995), and USDCHF at parity (first time ever). But, by mid-day yesterday, the market’s seemed soothed in anticipation of today’s FOMC meeting.  Now one-week EURUSD and USDJPY implied vols are only 15% and 21%, respectively.  Now, everyone is waiting for the Fed.  Some people think that they will go a whole percentage point today (that’s 100bps to the layman).  But some only expect 50bps (a number that previously seemed huge).  Depending on what happens, we could see a [...]

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Current account balance (Survey: -183.8BN, Actual: -172.9 BN)
Empire Manufacturing (Survey: -7.4, Actual: -22.2)
Net Long Term TIC Flows (Survey: $60.0BN, $62.0BN)
Industrial Production (Survey: -0.1%, -0.5%)
NAHB Housing Market Index (Survey: 20)
Upcoming Economic releases: FOMC Rate Decision, PPI, Housing Starts, Building Permits
US data today was mixed:  TIC data as expected at +$62 bio, with a record net purchases of $36 bio of US Treasuries; industrial production -.5% on a big fall in utility production though smaller fall in manufacturing; Q4 current account narrowed $4.5 bio and is expected to continue to improve on slowing US demand and the declining trade value of the [...]

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