Overnight Developments In The Dollar…
against commodity currencies like the CAD, AUD and NZD, of which we are
short. The bounce had been elusive over the last couple of weeks as we did
take a couple of minor hits trying to time, this time we appear to have got it
right. As of this morning, our open positions are up 750 pips for those on my
FX Alert Service.
Â
some gains here, and we may just do that, however, there may be some more
upside here, and frankly, the rationale behind these trades was somewhat macro
based so patience may ultimately bear more fruit. Consider these overnight
developments:
-Â Canadian Housing Starts Data, while beating
consensus estimates, showed troublesome signs when you picked through the
data. The rise was fully explained by a 17.1% surge in multiple urban starts,
single family starts, a better gauge, were off 2.8%
-Â Rate expectations in Canada and Australia
were thrown out last night and yesterday as both central banks decided to
leave rates on hold and echoed caution going forward. Apparently their strong
currencies were of significant concern.
-Â The rumored “Russian bids” in EUR/USD, by
way of reserve diversification, did not materialize last night at 1.3280, if
no bids are seen at the previous level where bids were seen, 1.3200, look for
another leg lower. (this is rumor although there may be an element of truth,
but it makes for interesting commentary)
-Â Chinese premier Wen indicated that China
will gradually make its exchange rate more flexible.
Now the hard part begins, effectively managing
ones positions to fully maximize them.Â
As always, feel free to send me your comments
and questions.