Markets reverse on Iran fears…
It has been a very erratic day in the markets. We started out very positive. All economic numbers were looked at positivly and Stocks ralled and U.S. futures drifted lower on the idea that Rates will remain unchanged.
But all good things come to an end. The CB Governor said that Iran has no plans to stop selling oil in dollars COMPLETELY. Aslo Duties were inposed on some China imports. This is the real reason that the dollar came off so hard. The move was quick and rather painfull. Dollar Brazil, which yesterday took out a key option level at 2.0500, reversed sharply and currently is trading at 2.0530 (ouch).
I feel that in the bigger picture things are unchanged. My trades in order of conviction:
Stay long Euro’s
Look for lower rates in Brazil.
Ride the curve in Argentina.
As for Mexico I reduced some of my position in the forwards as the curve is rather flat and I do not see much upside at this time. I am still short rats but not quite as short as before.
That is about it…..
Good Luck and Good Forex trading.
Markets like the numbers….
We had GDP out this morning and the numbers (the final revision of the 4th quarter) resulted in the market’s reacting well. Although the numbers came in basically as expected (2.5% vs 2.2%) dealers seem to be taking this report and running with it. Emerging Markets currencies are stronger and Fixed income has preformed well.
Iceland CB officials warned of possible interest rate hikes in the future if new smelter projects are announced. Aslo Poland’s Foreign Currency rating was upgraded to A- on balanced growth prospects. This was unexpected in the markets.
In Asia I am hearing reports of CB intervention in Singapore and India. Both currencies weakened considerable on the reports.
I am staying the course, short dollars (against Euro,Mexico,Brazil,Argentina) and looking for lower rates in Argentina,Mexico, and Brazil.
I am long dollars against Singapore and China.
Good Luck and Good Forex Trading.
Bernanke speaks….
Fed Chairman Ben Bernanke will be testifing before the Joint Economic Committee on the Economic outlook. Earlier he has testified that “predominant policy concern remains the risk that inflation will fail to moderate as expected.” It would be my guess the Mr Bernanke will restate this today. It all remains in the numbers. If the numbers come out weaker look for rate cuts. Moderate to stronger growth I believe we are in a holding pattern. Overnight crude prices spiked. This is not a good sign as higher crude will translate into higher inflation (or at least higher inflation fears). The U.S. economy is clearly on the edge. I am of the opinion that we will fall to the side of a weaker economy, with inflation on the higher side. Not a good combination.
Good Luck and Good Forex Trading…..
I am Back…..
Hello all, I am back. Actually returned Sunday night but have been a bit behind and trying to catch up. The tornument was fun, kids played well, and my little man made one spectacular diving catch in centerfield to end a rally. Ok he was 0 for 8 with 2 strikeouts and 2 walks but we will not talk about that.
On to the markets.
Really no where. I think this is what we are store for going forward. I think you need to pick and choose your spots, try to trade from a position of positive carry and take profit when available. Do not look for the homerun but rather a few singles and doubles.
Not alot in this post but just working my way back in.
Good Luck and Good Forex Trading.
Play Ball
Today is one of those days that I previously wrote about. A day off to watch my son play baseball. We are heading off in a few hours to Rehobeth Beach in Delaware to participate in a three day baseball tornument. Hopefully the weather holds out out (it looks like rain right now)and the kids have son fun. As for the market, I expect little change. It seems to have been a quiet overnight session and I still believe that the Mexican Central Bank will hold rates steady. Anyway I will try not to look at the markets until I return on Sunday evening (very late I hope as the Championship game is not till 4.30pm).
Everyone needs a break every now and then.
Good Luck and Good Forex Trading.
-
*************************
