Off the Grid….
I will be away on Vacation for the next week. Back on April 5. I will try to post occasionally during the week but it will not be a priority.
Don’t miss me too much.
Colombia rates steady, Canada currency strength
Colombia
Rate announcement today and here is the latest comment from the Finance Minister,
“Economic conditions show the Cenbank should maintain rates on Friday”
As for the rest of the market, everything is very quiet. The Dollar is retracing a little of its gains over the last few days but I think this is only a bit of profit taking. In the case of Canada I wrote last week that I felt we were heading toward parity with the Dollar. I still feel that way. From my contacts at Canadian banks they have the same feeling and believe the CB understands that it is inevitable that it happens. What they want is a slow appreciation of the currency and not a move to quickly.
I like selling the Dollar here at 1.0270 with a stop above 1.0300. I think if we take out the 1.0300 we can move up quickly (triggering lots of stops) and will prevent a better level to re enter the short. I would look to go short again at 1.0400.
Good Luck and Good Forex Trading
Brazil, New Regulation’s
Brazil
Meirelles is set to announce new regulations on the financial system of Brazil. These new regulations should have little impact on the currency as they seem more designed to modernize outdated Reg’s before he leaves office. The ultimate goal is for a fully deliverable currency but I would not be looking for this in the near future. The Copom minutes were also out today and there is a definite lean toward tightening. This is of little surprise as the vote at the meeting was 5-3. 50bp in April seems like a done deal.
Argentina
The upcoming debt exchange looks likely to surpass 75% participation. This is good news and has had bonds flying high. Longer dated NDF’s (12mth duration) has come off sharply in the last few days with yields in the 12 months now approaching 11%. With a stable currency this may seem a tempting short but I am holding off at these levels as there isn’t enough yield for me to enter these waters.
Euro
Continued talk of a Greek default and of course the Portugal problems point to staying short the Euro.
Good Luck and Good Forex Trading.
Euro, lower again (Portugal Downgraded)
Euro came off hard overnight as Greece and now Portugal fall into further trouble. Fitch came out and lowered Portugal’s credit grade to AA with a “negative” outlook. This has increased fears that these countries will struggle to meet their debt commitments. It looks as if Greece, if it is bailed out, will be by the IMF and not the EU! Some endorsement on the Union. As someone commented on my morning conference call, “The ECB is not going to do anything to stop the slide in the Euro. It is good to have a weak currency as you try to get out of recession”. Competitive Devaluation?
As for the Euro it broke through all support at 1.3440 and has continued lower. It would not surprise me to see us go up and test that level again but I would definitely get short (or add to shorts) at these levels. The market continues to talk about 1.2000 Euro in the months to come.
Good Luck and Good Forex Trading
Bloggers are not writers
I saw this on PunkRockHR. Now this is Funny!
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