Granted consumer confidence is down and the unemployment rate ticked up, (but) we're not sure if this is enough for the RBA to pull the trigger on easing in August.

Kathy Lien

Categorized in : Company News

So the potential for an initial short squeeze is high if the central bank stands pat and the outlook thereafter will depend on how strong of a message the ECB sends.

In the long run, Brexit also raises questions about the Eurozone' s viability because if major countries like Britain start dropping out the EU, nationalism could drive smaller Eurozone nations to exit out of the euro.

When a currency...squeezes higher quickly, causing investors to panic and abandon their positions, the rally could be sharp and aggressive particularly when positions are skewed so heavily in the opposite direction.

The general effects of the RRR reduction are questionable but China's government would not have taken this move if they were not concerned about the economy, chinese data is notoriously difficult to handicap but this gives us reasons to believe that manufacturing and service sector activity slowed in the month of February.

It is not your ordinary day in the foreign exchange market when the Russian rouble and the Mexican peso hit record lows while the Hong Kong dollar falls to its weakest level since 1999, emerging market countries bear the brunt of the selling because the slowdown in global growth and volatility in commodities causes significant economic damage for these countries.

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It is not your ordinary day in the foreign exchange market when the Russian Ruble and the Mexican Peso hits record lows while the Hong Kong dollar falls to its weakest level since 1999, emerging market countries bear the brunt of the selling because the slowdown in global growth and volatility in commodities causes significant economic damage for these countries.

The price of oil could fall below $30 a barrel but we do not see much weakness beyond that and by the end of the year we expect prices to settle closer to $40.

Everyone is watching euro this week and we believe that it will test and break $1.05. While investors have completely discounted easing by the ECB, there's a great deal of uncertainty surrounding what actions the central bank will take.

Friday's U.S. retail sales report is important for the dollar but unless spending contracts sharply, it will not alter the market's expectations for Fed policy, in fact with average hourly earnings on the rise and payrolls increasing more than expected, chances are the report will breathe new life into the dollar.

A weak number will provide an attractive opportunity to buy USD/JPY lower or sell EUR/USD higher for a move in rates later this year, the dollar will pop on a strong number and traders should also look to join the move on shallower retraces.

Based on the performance of the U.S. economy alone, the Fed should raise rates but they do not operate in a vacuum.

We believe there's enough here for the Fed to raise interest rates for the first time in nine years, while we are bullish dollars and believe that further gains are likely, there's just under two months to the next monetary policy meeting and the dollar is overbought.

While some economists look at these numbers and say that they are weak or the economy is worse off than before because of the downward revisions in 2012 and 2013, we believe there's enough here for the Fed to raise interest rates for the first time in nine years, while we are bullish dollars and believe that further gains are likely, there's just under two months to the next monetary policy meeting and the dollar is overbought.

While some economists look at these numbers and say that they are weak or the economy is worse off than before because of the downward revisions in 2012 and 2013, we believe there's enough here for the Fed to raise interest rates for the first time in 9 years, while we are bullish dollars and believe that further gains are likely, there's just under 2 months to the next monetary policy meeting and the dollar is overbought.

It signals to FX traders that there is a sense of calm in the mar... by Kathy Lien

It signals to FX traders that there is a sense of calm in the markets.

We never expected the Fed to tighten next month but we were hoping that they would set the stage for a move in September. however if data continues to miss, they may refrain from signalling a change in monetary policy three months forward.

If payrolls rise less than 200k, we could see a stronger rally in EUR/USD and a steeper decline in USD/JPY because a weak report would lead investors to think that the Federal Reserve will be more patient with raising interest rates, a stronger report however would be extremely positive for the greenback by hardening expectations for a 2015 rate increase.