Wednesday January 21, 2009 - 21:32:59 GMT
Share This Story
global-view.com - www.global-view.com
FX Blog- GVI Forex Month Ahead Forex Forecasts
Forex Forecast of Major Currency Pairs
The Global-View.com Month Ahead Currency Outlook is prepared weekly by the trading professionals at GVI Forex. For information on the GVI Forex Service Click Here
January 22, 2009
Focus now on new U.S. government. No choice but to hit the ground running.
Fed has been very aggressive in attacking U.S. problems, but markets have not responded yet.
U.S. economy continues to weaken. 1Q09 may be worse than 4Q08.
Credit markets in the U.S. have been unfreezing, but deleveraging is not done.
USD tone positive, partially due to worries overseas.
Japan has been hard hit by sluggish demand for its exports from abroad.
Fears of a return to the deflationary price pattern that plagued Japan over the past two decades.
Bank of Japan has effectively returned to a ZIRP (Zero Interest Rate Program) with its target or overnight funds now +0.10%.
Nikkei closely correlated to USD/JPY values.
Deleveraging play favors JPY. Tokyo unhappy with strong JPY. JPY remains bid.
Click on chart for two year history
ECB behind the curve. It lost a stellar reputation by appearing to be out of touch
Monetary policy still has room for additional ease. ECB too focused on Germany to the detriment of other members?
Uncertain how weakness of economies, e.g. Spain and Ireland, will play out given no currency devaluation option.
EUR vulnerable until deleveraging ends.
Click on chart for two year history
U.K. economy in a bad state. Financial sector hard hit.
Bank of England has become aggressive in policy. Close to a Quantitative Easing (QE) policy.
GBP vulnerable vs. the EUR. CHF-
Swiss economy slowing.
Swiss National Bank for all practical reasons has cut rates to zero.
CHF trades in a relatively steady range vs. the EUR.
Commodity Currencies CAD-
Misnomer to call CAD a commodity currency, but heavily influenced by energy prices.
Canadian economy heavily influenced by the U.S.
Bank of Canada policy very easy at the present time. Inflation back within BOC target range.
CAD trading mostly inversely with USD.
Australia and New Zealand heavily dependent on global demand for commodities. Demand is way down, so the two are suffering.
Both banks have already eased aggressively; additional stimulus in the pipeline.
More than CAD, expect AUD and NZD to trade inversely with the USD.
John M. Bland is co-founder and a partner of Global-View.com. Prior to Global-View, he was a Vice-President and senior dealer in a forex inter-bank and futures trading arm of ContiCurrency, a subsidiary of the Continental Grain Company in NYC. Prior to that, he was an early member of the Chemical Bank corporate advisory service in NYC, and also worked in international liability management for that bank. John holds an MBA from the Hass School at the University of California at Berkeley and a bachelor´┐Żs degree in International Economics from Berkeley.
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
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."