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FX Blog- GVI Forex Month Ahead Forex Forecasts for March 4, 2009
US Currency Outlook -- Forex Currency Pairs
Forex Currency Pairs
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
March 4, 2009
Bank bailout plan still developing too slowly.
USD still closely linked to stocks. Gold risk aversion play easing?
Fed has been very aggressive in attacking U.S. problems.
U.S. economy weak. Expect extended lead time between stimulus and its impact.
Japan hard hit by sluggish export demand. Economy falls off a cliff?
Fear of return to Japanese deflationary price pattern.
Bank of Japan ZIRP (Zero Interest Rate Program) with overnight rate target +0.10%.
Nikkei correlates to USD/JPY.
Fiscal year end repatriation (March 31) should favor JPY.
Click on chart for two year history
ECB behind the curve. Internal ECB dissention? ECB losing a stellar reputation.
Growing concern about East Europe a new ´┐Ż/$ weight.
Lack of a common E-Z fiscal policy lever a problem. E-Z bonds in future?
March 50bp rate cut to 1.50% widely expected.
PIGS (Portugal, Ireland, Greece, Spain) economic weakness worry with no weak fx option.
East Europe a worry.
Click on chart for two year history
U.K. economy weak. Financial sector hit hard.
Bank of England aggressively easing. Close to Quantitative Easing (QE) policy.
GBP fundamentally vulnerable vs. the EUR. CHF-
Swiss economy slowing. Inflation below target.
Swiss National Bank for all practical purposes has cut rates to zero.
SNB has threatened intervention (selling CHF) vs. the EUR.
CHF should trade weaker vs. the EUR.
Commodity Currencies CAD-
Misnomer to call CAD a commodity currency, but heavily influenced by energy.
Canadian manufacturing and energy economy tied to the U.S.
Bank of Canada policy easy. Quantitative Easing decision in motion. Inflation within BOC target range.
CAD trading mostly inversely with USD. Range trading
Australia and New Zealand dependent on commodity demand. Demand is down, so both suffer.
Both banks have already eased aggressively; additional stimulus in the pipeline.
Key inflation measures contained.
More than CAD, expect AUD and NZD to trade inversely with the USD.
John M. Bland is an author, 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. He was also an early member of the Chemical Bank corporate advisory service in NYC, and worked in international liability management at 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.
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