The British Pound is all but guaranteed a week of heavy volatility as the busy economic calendar headlined by a pivotal interest rate announcement from the Bank of England is compounded by hints of a downward reversal in risk appetite.
The New Zealand Dollar will continue to look to risk trends to guide directional momentum in the week ahead: further gains can be expected if stock markets are to remain supported, but any opportunity for economic fundamentals to recapture the spotlight will likely open the door for a sharp reversal lower.
US Dollar Reversal and Breakout a Matter of Time – But When? Euro May Cash in on its Anti-Dollar Role Before the ECB Decision Japanese Yen May Trade Heavy if Risk Appetite Continues British Pound Volatility Ahead on BOE Rate Decision, Equities Reversal Swiss Franc Eyes Volatility on CPI and Employment Data Results Canadian Dollar May Yield to Fundamentals as Labor Market Falters Australian Dollar Charges Ahead, But the RBA May Trip the Rally Up New Zealand Dollar May Lead Losers If Stock Rally Reverses
While many of the other majors are at or near their respective anti-dollar highs; the Aussie currency has already confirmed its bullish break. Now the fundamental and technical outperformer waits for either risk appetite to fuel follow through or find an alternative means of strength in market-wide US dollar selling.
The dollar is near collapse; and its liquid counterparts stand to reap the benefits of the potential cross-currency winds. However, from a fundamental standpoint who stands to benefit the most?
- US Dollar Teetering on the Edge of the Abyss after a Better GDP Release? – Euro Could be the Primary Benefactor of Dollar Selling, but Take Account of the ECB – British Pound?s Risk Correlations May Not Weather the BoE?s Rate Decision – Commodity Bloc Hold Offers Its Own Employment Reports and Rate Decisions
As I had expected, the Dollar fell against Euro, Sterling and Aussie on better than expected GDP data yesterday. Although consumer spending which accounts about 70% of US economy remains weak , unemployment is expected to keep rising and Stocks headed lower after the report suggest a very weak and shaky recovery outlook, the recession seems to getting closer to it’s end or at least, it’s not getting worse
There is a lot of data scheduled over the coming week; and much of it holds the kind of market moving impact that could trigger breakouts. This is fortunate for those that love volatility; because many of the majors are resting on major anti-dollar support levels.
I will be offline for a few days next week as I will be conducting seminars at the Forex and Options Expo in Las Vegas. If you are around, please check out and come by and say hi! The convention will be held at Caesars Palace August 2-4 Here are my sessions: Monday 8/3: Fast and Furious Trading 1:15pm-2:15pm Monday 8/3: FX360.com Tips and Trading Strategies 2:30pm-3:30pm Tuesday 8/4: Five Fundamental Risks for the Currency Market 4:30pm-6:00pm Tuesday 8/4: *How to Trade News 6:30pm-7:30pm *Invite Only **FYI – I will also be in Singapore in August. More details to come
I found something really interesting about the similarities of some of the news headlines in July to that of the 1930s. Here’s news from July 24 2009 and July 24 1930
on Greenberg: Wall Street’s Dirty Bond Fund Secret
on State of the Market – 11/4/08
on AVAFX Review
on China Q4 GDP Growth Could Hit 10%: Official
