Boxed-In
European currency futures are selling off after fresh
inflation data made it more unlikely that the European Central Bank will soon
cut interest rates to stimulate the continental economy. Fear that the economic
slowdown in the US and Japan could lead to a global economic slowdown is
dominating many trading desks’ focus. Despite the usual pattern where money
flows into the country that offers the highest interest rates, higher rates in
Europe — coupled with inflation — are being viewed as boxing in or limiting the
ECB in their ability to take aggressive action to ward off a slow-growth economy
and demand for goods.Â
The euro FX futures
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small island formation at the top of its recent down (corrective) channel and is
trading lower in the futures session as well, down .01210 at .91650.
Swiss francs
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PowerRating) and
British pound
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The
Japanese yen
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PowerRating), from the Implosion-5 List,
lapped higher but is trading down. Political turmoil and structural economic malaise
continue to pressure the currency.Â
April gold
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PowerRating) is down a steep 4.1 to 268.2, making good one
day late on a Turtle Soup Plus One sell signal, as traders square long positions
ahead of the Bank of England’s bullion auction. Lease rates also fell, helping
reduce the demand for futures.