ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The British pound
I moderated my bullishness on the Australian dollar in early December because Australia’s terms of trade have likely peaked for now and the Reserve Bank of Australia had lowered rates twice. Last week, I recharged my bullishness on the Australian dollar after the Federal Reserve extended its dovish monetary policy. The Australian dollar experienced a … Read more
Recently, the euro has received more focus than ever, especially as it printed new 11-month lows against the U.S. dollar and new 11-YEAR lows against the yen today (December 29th). However, over the past week, the British pound has fared even WORSE than the euro. The euro is now trading at 10-day highs versus the … Read more
This is an excerpt from an article I originally published on Seeking Alpha on November 15, 2011. Click here to read the entire piece.) Ever since the Bank of England announced more quantitative easing in the form of £75B of more bond buying, the British pound has bottomed and rallied against the U.S. dollar and … Read more
(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.) The relief rally for the U.S. dollar that I expected after the S&P downgrade of U.S. government debt did not materialize last week. {snip}…The dollar gained 1.6% over the franc BUT not until after the … Read more
On July 24, British Business Secretary Vince Cable was interviewed on the BBC’s Andrew Marr Show. During this interview, Cable made the case for further quantitative easing (QE) if consumer demand in the UK continues to weaken. While he was quick to point out that the Bank of England runs independently, he provided a ringing … Read more
(This is an excerpt from an article I originally published on Seeking Alpha. Click here to read the entire piece.) Almost a month ago, Bank of England Governor Mervyn King spoke at the Lord Mayor’s Banquet for Bankers and Merchants of the City of London at the Mansion House, and I wrote afterward that the … Read more
After scanning through the latest quarterly release of the “Statement of Monetary Policy” from the Reserve Bank of Australia, I was reminded that currency traders are trying to prepare for eventual rate hikes from the European Central Bank (ECB) and the Bank of England (BoE): “While financial markets continue to expect the US federal funds … Read more
Nothing like some geo-political drama to throw in some extra uncertainty into carefully laid out trading plans. After North and South Korea exchanged pleasantries early Tuesday, the dollar’s relief rally continued in dramatic fashion with a 1.3% gain. I am now even more convinced that the dollar will, sooner than later, retest the resistance at … Read more
Ahead of last week’s big events, I suggested that the market was setting up for a surprise reaction. So far, the biggest surprise has been the timing of the market’s big rally reaction after the election and the Federal Reserve’s announcement of quantitative easing and before the unemployment report. But that is not the surprise … Read more
Last month, as the British pound hovered around the converging support of the 50-day moving average (DMA) and the 200DMA, I noted that the currency “awaited a catalyst” before starting a new trend versus the U.S. dollar. At the time, I suggested that catalyst depended more on dollar-related forces. Sure enough, the dollar index followed … Read more