Tuesday July 26, 2005 - 02:43:48 GMT
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Tricom Futures and Foreign Exchange -
Forex: Turn your screens off, it's the Northern summer
The USD exited active New York trading mixed against key currencies on Monday as dealers continued to digest China's revaluation of the Yuan last week.
The dollar was flat against the euro and yen, weaker against sterling and the Swiss franc, but up against the Australian dollar as dealers adjusted positions skewed by the sharp moves of last Thursday. The Sterling proved the big mover overnight, on the back of short-covering. However, I think the upside will be limited to around 1.7550, and we will see the market back around 1.7300 within the next 7 trading days.
But dealers said China's first step toward a more freely-floating exchange rate is not expected to be followed up with another anytime soon. The initial rush to sell dollars has since faded, allowing traders to adjust positions and lock in profits.
U.S. stocks fell on Monday after earnings from some companies such as Xerox Corp. disappointed Wall Street and oil crept higher to $59 a barrel, reviving concerns about energy costs.
The USD has firmed up slightly in early trade today, but the market remains largely stagnant with the Northern summer moving into over-drive. Look for these conditions to continue for atleast another 4-6 weeks. Be prepared for alot of boring, unexciting trading days, punctuated by whippy sessions as a result of little volume around.
The market will now tread water for most of the week, with the only economic data of any note being Friday's US GDP(Q2). Tomorrow's Beige Book will be of some interest, but don't look for it to be a big market mover.
I think most of what i said yesterday still holds. I'm reluctant to get involved in these quiet markets as they are providing little in the way of direction or a range from which you can trade.
I know it probably sounds like a cop-out, but i just can't see any benefit in telling you to do something when i don't have a strong belief in it myself.
Today’s Economic Releases:
US: Consumer Confidence
Today’s Top Trades
· Buy AUD/NZD around 1.1110-20
For more ideas send me an email, firstname.lastname@example.org
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