Tuesday November 24, 2009 - 13:15:47 GMT
Share This Story
Black Swan Capital - www.blackswantrading.com
A Good Price for the Euro
ECB prepares to end emergency funds (Financial Times)
German Business Confidence Increases to 15-Month High, Exceeding Forecasts (Bloomberg)
Mexico Peso Set to Rally 20% as Pimco Says Buy After Fitch Debt Downgrade (Bloomberg)
â€śAlea iacta est.â€ť
FX Trading â€“ A Good Price for the Euro
Perhaps you saw this morningâ€™s release of Eurolandâ€™s economic data.
German GDP jumped by 0.7% in the third quarter. Adding to GDP was an inventory build and capital investment; subtracting from GDP was consumption and trade.
Not so stellar, but somewhat reassuring nonetheless, was an increase in new industrial orders â€“ rising 1.5% since last month but still down more than 16% from a year ago.
Is there still cause for concern among these and other improvements in official numbers?
Iâ€™d ask whether inventory-led growth is sustainable without a better contribution from consumption and trade. And Iâ€™d ask whether growth in new orders, buoyed largely by those for new freight equipment, can be sustained.
But regardless of what Iâ€™m asking right now, business morale in Germany has hit 15- month highs. That makes eight increases in a row and should build confidence among investors who realize too that Germany still has a lot riding on manufacturing and trade.
Oh ... and another question: will the strength of the euro restrict Germanyâ€™s potential?
No doubt, this overvaluation relative to the dollar is getting on the nerves of global central banks, enough so that they feel the need to comment on the fact. Will the euro have an impact on Germany? Probably some. Will that change the value of the euro? Not that fact alone. [Chart not available in text format.]
The euroâ€™s been consolidating after making a test of the $1.50 level. And while we wonder if $1.50 is a hurdle the euro will have trouble with, the technical picture looks familiar, as the euroâ€™s been able to break out from similar patterns along its uptrend this year.
A break to new highs any time soon would build a case for the euro to reach the $1.60 mark â€“ a level not seen since before the global financial crisis.
The big difference then was a global economy that was still moving along relatively well, albeit immersed in excess liquidity up to its eyeballs. Right now itâ€™s different; and while I donâ€™t want to take away from the recovery potential that exists for the euro, there seems little to justify the common currency reaching $1.60 any time soon.
Unless, of course, you recall that the US is the compost pile of the global financial garden. The only thing thatâ€™s going to grow there is a bunch of cannibalistic organisms serving to decompose anything hanging on to life.
And in this relative game, an empty dollar means a well-founded euro. Do I hear $1.60, anyone?
Thanksgiving is only a few days away ... and you know what that means â€“ Christmas music! (I particularly think itâ€™s too early for Christmas music, but when has what I thought mattered?) Fitting this wonderful world of currencies into the joy of Christmas, hereâ€™s a little jingle that you may have heard before, in one form or another:
The Dollar and Its Diving
John Ross Crooks III
Black Swan Capital LLC
Long-term trends, major global economic issues, interviews with top traders, book reviewsâ€¦
We do it all in our Currency Investor newsletter thatâ€™s geared toward newcomers and experienced investors who are looking for a conservative approach to the foreign exchange market.
In plain language we deliver global macroeconomic analysis and actionable ideas geared toward exchange rate fluctuations.
Our analysis is comprehensible and our recommendations consist of ETFs, so donâ€™t get turned off by buzz words like â€śexchange ratesâ€ť or â€śforeign exchangeâ€ť â€“ this investing strategy is as easy to implement as buying and selling stocks.
Plus, at $39 per year itâ€™s a deal youâ€™d be hard-pressed to find anywhere else. Thorough global analysis plus complete investment guidance ... and all for only $39 per year? You canâ€™t beat that with a stick. Click here to read more ...
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."