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Loonie and Aussie Share Downward Bond
From Forex Blog, 10 month ago, Read 0 times. Similar articles
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Tide is Turning for the Aussie
From Forex Blog, 10 month ago, Read 0 times. Similar articles
“Australia is about to enter a boom that should last decades…The Australian dollar is unlikely to go back to where it was, and manufacturing will shrink in importance to the economy, perhaps even faster than it has been.” This, according to Martin Parkinson, Treasury Minister of Australia. While 30 years from now, Mr. Parkinson’s prognosis might probe to be accurate, I’m not so sure it applies to the period 3 months from now. Here’s why:
First of all, the...
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Emerging Market Currencies Brace for Correction
From Forex Blog, 10 month ago, Read 0 times. Similar articles
“It was the spring of hope, it was the winter of despair,” begins Charles Dickens’ The Tale of Two Cities. In 2011, the winter of despair was followed by the spring of uncertainty. Due to the earthquake/tsunami in Japan, the continued tribulations of Greece, rising commodity prices, and growing concern over the global economic recovery, volatility in the forex markets has risen, and investors are unclear as to how to proceed. For now at least, they are responding by dumping...
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NO QE3: What are the Implications for the Dollar'
From Forex Blog, 11 month ago, Read 0 times. Similar articles
The verdict is nearly in; there will be no QE3. The second round of quantitative easing (?QE2?) will expire at the end of this month, and while it will not be unwound for quite some time, the Fed has indicated that it will not be followed by yet another round. The question on the minds of forex traders, of course, is what does this mean for the Dollar'
In his most recent press conference, Ben Bernanke, himself, indicated that QE3 was unlikely. According to a survey conducted by Bloomberg News,...
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Swiss Franc is the Only Safe Haven Currency
From Forex Blog, 11 month ago, Read 0 times. Similar articles
According to conventional market wisdom, there are three safe haven currencies: the Swiss Franc, Japanese Yen, and US Dollar. It is to these currencies that investors flock whenever there is a crisis, or merely an outbreak of uncertainty, and for much of the period following the collapse of Lehman Brothers, the three were closely correlated. As you can see from the chart below, however, one of these currencies has begun to distinguish itself from the other two, leading some to argue that there...
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Is it Possible to Trade Forex Part-time'
From Forex Blog, 11 month ago, Read 0 times. Similar articles
This week, I came across an article in the San Francisco Gate (which, incidentally, has really ramped up its forex coverage over the last year) that addressed this very topic. Given that part-time forex traders probably outnumber those that practice the craft full-time, such an article was long overdue.
In sum, the author advises part-time traders to concentrate their trading during the busiest times of the day, or failing that, to simply trade the most active currency pairs during the period...
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Japanese Yen In ?No Man's Land'
From Forex Blog, 11 month ago, Read 0 times. Similar articles
This, according to a hedge fund manager that has decided to cancel all of his fund’s bearish bets on the Japanese Yen. The reason: the yen is rising, and it’s unclear when – or even if – the government will intervene to push it back down. Even though the yen’s strength is fundamentally illogical, it seems that investors are growing increasingly wary of betting against it.
As I pointed out in my previous post on the Yen (“Japanese Yen Strength is Illogical,...
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Forex Volatility Continues Rising
From Forex Blog, 11 month ago, Read 0 times. Similar articles
This week witnessed another flareup in the eurozone sovereign debt crisis. As a result, volatility in the EUR/USD pair surged, by some measures to a record high. Even though the Euro rallied yesterday and today, this suggests that investors remain nervous, and that going forward, the euro could embark on a steep decline.
There are a couple of forex volatility indexes. The JP Morgan G7 Volatility Index is based on the implied volatility in 3-month currency options and is one of the broadest...
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Euro Nears Breaking Point
From Forex Blog, 11 month ago, Read 0 times. Similar articles
It’s deja vu all over again in the forex markets as another twist in the sovereign debt crisis has sent the euro tumbling by the greatest margin in nearly a year. It was only last month that I posted “The Euro (Still) has a Greek Problem,” and yet, forex markets are once again reacting to the possibility of a Greek default as thought it were a new development. At the very least, investors finally seem to be acknowledging the inevitable.
There have been several factors at work...
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S&P 500 Decouples from Euro'
From Forex Blog, 11 month ago, Read 0 times. Similar articles
While I have written quite about forex correlations in recent posts, the focus has primarily been on correlations that exist between currencies. In this post, I would like to address a correlation that exists between currencies and other forex markets- specifically the relationship between the Euro and US stocks.
If you look at the chart above, you can see that an unmistakable correlation exists between the S&P500 and the EUR/USD that stretches back at least six months. Generally...
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