Thursday June 23, 2005 - 05:17:29 GMT
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Tricom Futures and Foreign Exchange -
Forex: The Main Event: Greenspan Vs China
A largely uneventful trading day so far today. Today, we have Greenspan and Snow speaking on China, i'd be expecting more of the same rhetoric suggesting that the Chinese revaluation is not a case of "if", but "when". I can't see either of these guys rocking the boat in their comments.
The USD strengthened on Wednesday, led by stellar gains against major European currencies amid market speculation European interest rates are headed lower. Minutes released on Wednesday from the Bank of England's last policy meeting indicated some sentiment for a rate cut. Rate cut speculation in Europe has moved to the forefront of the agenda for markets after Sweden lowered rates by a hefty 50 basis points on Tuesday. Speculation that the European Central Bank could soon lower borrowing costs to boost the region's sluggish economy has also grown, despite several ECB policy-makers saying current rates of 2 percent are appropriate. The EU's political problems, the slowing of the EU economy, higher rates in the US, and now heightened talk of rate cuts throughout Europe, means we must continue to look for the USD to trade higher. Similarly, the EUR and GBP will remain capped on the upside, while the downside remains the obvious path.
U.S. Treasury debt prices climbed on Wednesday, with benchmark yields briefly dipping below a key technical level as developments both at home and abroad gave the market a distinctly bullish tilt.
The laundry list of bond-friendly events encompassed everything from talk of interest rate cuts in Europe to soaring oil costs and included a bold call from an influential fund manager suggesting the Federal Reserve may soon stop tightening interest rates.
U.S. stocks were flat on Wednesday as weakness in the auto sector followed Ford Motor Co.'s slashing of its earnings forecast was offset by strength in electronics manufacturers' shares after Jabil Circuit Inc. raised its outlook.
Today’s Economic Releases:
US: Weekly Jobless Claims
US: Existing Home Sales
US: Greenspan and Snow speak on China
Today’s Top Trades
· Sell EUR/USD strength towards 1.2140-50
. Sell AUD/USD around .7785-90
. Buy USD/CHF around 1.2680
For more ideas send me an email, [email protected]
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