* The USD mounts a comeback
* Fed rate cut looks certain after weak Beige Book, dovish comments
* Multiple interest rate decisions next week: ECB, BOE, RBA, RBNZ, and BOC
* Risk aversion wanes even as money market conditions worsen

The USD managed to stage a rebound just one week after dropping to all-time lows in the US dollar index last Friday. It’s still too soon to indicate that the downside is over for the USD, but Friday’s price action generated a break of the primary daily trendline lower, which had been operative since the middle of August. EUR/USD is closing on key daily channel support at 1.4620/30, and a daily closing break below would serve as confirmation that the uptrend has ended.  Full text »

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This is the extract of Joseph Trevisani’s presentation at the International Traders Conference (ITC) , held in Barcelona in October ‘07. Summary

This is the extract of Torsten Kroeger’s presentation at the International Traders Conference (ITC) , held in Barcelona in October ‘07. Summary

This is the extract of Ron Schelling’s presentation at the International Traders Conference (ITC) , held in Barcelona in October ‘07. Summary

* Has the Euro peaked?
* US housing, confidence data to keep the focus on the negative
* Eurozone sentiment indicators will be key
* JPY-crosses (carry trade) setting up potential for a further drop

Thanksgiving week saw the USD take another dive, giving up further ground to the JPY as overall market volatility continued to make life difficult for carry trade positioning. In last week’s update, I suggested that a daily/weekly close below the 108.70 level in USD/JPY would likely signify another ‘ratcheting down’ of the USD/JPY rate, with additional potential to the 105/106 area. We got the daily/weekly close below that level and that keeps the focus on the downside while it holds as resistance. Only a recovery past the 109.70/80 area would signal that the downmove is stalling and possibly reversing. The relatively sharp bounce seen on Friday generated a ‘hammer’ on the daily candlesticks, frequently an indication of an upside recovery after a decline, so Monday’s price action will be critical.  Full text »

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About the Author Timothy Green was born in Suffolk in 1936 and read history at Cambridge. He has been a journalist for over forty-five years, writing for Life, Fortune, The Smithsonian, Reader’s Digest and The Observer. He was editor of The Illustrated London News from 1964-66. His first book, The World of Gold, came out in 1968 and has been revised many times. He worked as a consultant on the annual Gold Surveys of Consolidated Gold Fields and Gold Fields Mineral Services (now GFMS) for

* Commodity reversal is underway
* Risk aversion to keep carry trades under pressure
* Holiday-thinned trading conditions likely to heighten volatility
* Heavy data schedule all around next week

Carry trades (JPY-crosses) were once again the big movers, with most registering sharp losses as increased risk aversion sends speculative traders running for cover. The heightened risk aversion stems from continuing concerns over the health of the financial sector, owing to still large levels of toxic MBS assets corroding bank balance sheets and fears of further large write-downs in coming quarters. To give you an indication of the level of risk aversion, we are now back at levels last seen at the height of the June/July credit market meltdown. Adding to risk aversion is the approaching end-of-year, which typically sees speculative portfolio flows reduced as asset managers lock in gains and cut losing positions.  Full text »

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* Credit concerns and write-downs pummel stocks and risky assets
* Signs of a USD recovery are building
* Eurozone finance ministers meet Monday/Tuesday
* Heavy data schedule all around next week

The USD sank to new lows in its current downtrend against most major currencies, but by the end of the week, it was on the rebound against all but the EUR and JPY. Notably, however, it was not a US dollar-centric rebound, but rather a messy unwinding of risky asset trades, fueled by further write-downs (and rumors of still more losses and write-downs) of MBS (mortgage-backed securities) debt held by banks. The exodus from risky trades saw stocks plummet, JPY-crosses plunge, gold rejected from just below $850/oz, and commodities retreat from new highs.  Full text »

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* USD slumps further, Gold breaks $800/oz and oil hits $95/bbl
* Fed signal on future rate cuts ignored as market looks ahead
* ECB & BOE expected to hold rates steady; RBA to hike 1/4%
* Fed Chair Bernanke updates Congress on Thursday

The USD slumped to new lows against all major currencies (apart from the JPY) as the Fed delivered on expectations of 1/4% rate cut at mid-week. The rate cut came with a statement that was roundly considered more hawkish than most had been expecting, but still the US dollar could find no support. Prior to the Fed’s rate decision, 3Q advance GDP came in well above consensus forecasts at 3.9%, but the dollar stayed soft. The same effect was seen on Friday when Oct. NFP data showed an increase of 166K new jobs, nearly double consensus estimates, and the dollar declined to fresh lows. (See more on the NFP report below.) Bottom line–the USD continues to suffer from an overwhelmingly gloomy outlook on the direction of the US economy and interest rates, and there appears to be no light at the end of the tunnel.  Full text »

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