past may have been the most wrenching in the history of US equities.From Monday to Friday the Dow lost 18.1%, the
S&P 18.2% and the Nasdaq 15.3%. European and Asian bourses had their worst
week on record and exchanges in Russia,
Indonesia and the Ukraine
halted trading. But once again, as stocks crashed and burned the dollar rode
high. The US
currency may have lost 3.8% against the Japanese Yen and traded even against
the Swiss Franc but it gained against every other major currency:2.0% against the Euro; 9.4% versus the New
Zealand Dollar; 3.8% against the Pound Sterling; 16.2% against the Australian Dollar
and 8.7% versus the Canadian Dollar.
coordinated 50 basis point rate cuts by the central banks of the United States,
the European Monetary Union, England, Canada and Sweden, combined with the
earlier 100 point cutby the Reserve
Bank of Australiaand the smaller
reduction by the Peopleâ€™s Bank of China killed
any remaining rational for the carry trade. Though the Bank of Japan did not reduce
rates, its base stayed at 0.5%, the rate differential between high yielding
currencies and the yen that had drawn so much risk capital to the yen crosses
is headed into oblivion. The banks that cut will cut again and for traders these
crosses are on a one way elevator down.
The degree to which the New Zealand and Australian
Dollars and to a lesser extent the Canadian Dollar, the Euro and the Swiss
Franc were fortified by their yen crosses is illustrated by the extraordinary capitulation
we have seen.The nzd/yen and aud/yen
have lost 38.5% and 39.6% since their respective peaks, the cad/yen 31.5%. The
US Dollar has gained 27% against the kiwi, 33% versus the aussie and 28%
against the loonie. The euro and its cross have seen similar movement with the
euro/yen off 20% from its high and the euro down 16% against the dollar. Even the
relatively low yielding Swiss Franc and its cross have declined with the
swiss/yen off 15% and the franc down 18% against the US Dollar.
beginning of the stock crushing phase of the credit crisis the currency markets
have clearly viewed Wednesdayâ€™s rate cuts as a foregone conclusion. Why else
sell the yen crosses so hard?Perhaps
the equity markets, which had been clamoring for these cuts for several weeks,
might have taken early comfort in currency tradersâ€™ opinion that rate cuts were
true that some of the positive movement to the US Dollar is part of a mass
flight from central bank rate inevitability in the yen crosses. But dollar
strength is not just the byproduct of the collapse of the carry trade.It is also a vote for the supremacy of the
greenback and the US
economy. The currency markets are telling the economic and financial world
where the recovery will take first and strongest root.This conclusion, perhaps unbelievable in the
face of the current economic catastrophe, is supported by the current level of
the US Dollar against its major competitors. The euro has returned to the level
it held against the dollar before the eruption of the sub prime problem last
August. The Pound Sterling and all the yen crosses are far below the levels of
last August, as are the Aussie, the Kiwi and the Canadian Dollar.Only the Japanese Yen and the Swiss Franc are
stronger versus the US Dollar.
preference for the US
currency over that of every other country in times of crisis is historically
understandable.The US has the
largest unified economy in the world, the largest internal market, and the
worldâ€™s reserve currency. No foreign economy or currency could well survive a US collapse.
Whatever measures are successful (or not) in
stemming this economic crisis, currency markets are betting that the first
beneficiary will be the US Dollar and its economy.Investors can rationally expect that the American
government will not let its banking system dissolve and that it has the power
to accomplish that task.The prime
lesson Mr. Bernanke took from his study of the Depression, and the chief Fed
policy error at that time was that it permitted and indeed encouraged a
contraction of the money supply.At the
risk of future inflation the Fed has poured money into US financial
system in unprecedented amounts.
the currency market assumption that worldwide rates would have to come down surfaced
when the financial crisis turned into a severe credit crunch and was
illustrated by the huge selling of the high yielding yen crosses, so it appears
that the ascent of the dollar is the currency markets judgment on the outcome
of the economic crisis.
sub prime and credit crises have far outstripped their source in the United States. As
was the fount of the crisis so, at least in the opinion of dollar traders, will
it be the source of the recovery.
Joseph Trevisani Chief Market Analyst FX Solutions
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
Tue 19 Dec
09:00 DE- IFO Survey
13:30 US- Housing Starts/Permits
13:30 US- Current Account Wed 20 Dec
15:00 US- Existing Homes Sales
15:30 US- EIA Crude Thu 21 Dec
03:00 JP- BOJ Decision
13:30 CA- CPI & Retail Sales
13:30 US Weely Jobless
13:30 US- GDP Fri 22 Dec
09:30 US- GB- GDP
13:30 US- core PCE Deflator & Presonal Income
15:00 US- New Homes Sales
15:00 US- final University of Michigan
17:00 US- early Closes Mon 25 Dec
00:00 Christmas Holidays
Potential Trading Opportunities
POTENTIAL PRICE RISK: Medium Mon--10:00 GMT-- EZ- final November HICP. flash data are rarely changed.
POTENTIAL PRICE RISK: HIGH- Medium Tue --09:00 GMT-- DE- IFO Survey. Key report but usually not a market-mover
POTENTIAL PRICE RISK: HIGH- Medium- Tue --13:30 GMT-- US- Housing Starts and Permits. Leading indicators of activity
POTENTIAL PRICE RISK: HIGH-Medium- Wed --15:00-- US- Existing Homes Sales. Top Housing statistic
John M. Bland, MBA co-founding Partner, Global-View.com
Max McKegg’s Daily Forex Trading Forecasts
FX Trader, Max McKegg, forecasts all the Major currencies and the
Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders
in more than 30 different countries. If you are looking for a quality Forex TRADING Service, see details below.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.