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08/19/2007 - Fed discount rate cut unlikely to end volatility

Posted by FOREX.com's Weekly Strategy in August 17th 2007  
* Fed discount rate cut unlikely to end volatility
* More bad news is out there and ready to surface
* No rate hike expected from the BOJ
* ZEW for Germany and Eurozone may be very weak

What a week, to say the least. Equity markets plunged across the globe as investors panicked in the face of reduced credit availability, which accelerated de-leveraging and the unwinding of higher-risk positions. (De-leveraging refers to scaling down the size of position to a lower percentage of assets under management. In short, it means positions are sold sizes across all asset classes.) In the currency market, JPY-crosses (EUR/JPY, AUD/JPY, GBP/JPY, NZD/JPY) fell out of bed as carry trades continued to be unwound.  Full text »

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Filed under: Weekly Strategy