COMMENTARY

• U.S. Dollar: Will The Fed Rain On NFP Party?
  Written by Kathy Lien
  Last updated 1/5/2010 4:36:18 PM ET
  It has been a topsy-turvy day in the currency market as the dollar came back with a vengeance. The EUR/USD and AUD/USD turned negative in the second half of the U.S. trading session while currency pairs such as USD/JPY and USD/CAD recovered earlier losses. Although the S&P 500 hit fresh 15 month highs at the onset of trading, the gains faded after U.S. economic reports were released. Given the sell-off in stocks and the decline in Treasury yields, the rally in the dollar certainly smells like a pullback in risk appetite. In yesterday’s daily report we talked about how the pullback in the dollar should be temporary and as we head into Friday’s NFP release, there is a good chance that the dollar could sustain its gains as long as the Fed does not rain on the Payrolls party.
  1 comment
• Intraday Trade Alert: EUR/USD Sell at 1.4438
  Written by Roger Stojsic
  Last updated 1/5/2010 11:08:05 AM ET
  Further losses foretasted as prices break head & shoulders neckline support with additional bearish confirmation based on today's artifical intelligence forecast...
  9 comments
• U.S. Pending Home Sales Drop, Yen Strength Dominates
  Written by Kathy Lien
  Last updated 1/5/2010 10:28:22 AM ET
  Dollar bears are in control today as weaker housing market data confirms Fed President Duke's warning that the headwinds in the housing market are relatively strong. Pending home sales dropped 16 percent in November, the sharpest decline since the National Association of Realtors starting tracking the data in 2001.
  1 comment
• Will Euro Outperform the Pound?
  Written by Boris Schlossberg
  Last updated 1/5/2010 5:19:55 AM ET
  Risk currencies reversed their Asian session gains after an article in UK Telegraph suggested that the country may face financing troubles in the year ahead. The article quoted US fixed incomes investment group PIMCO as stating that it will not be a buyer of Gilts in 2010 given the massive supply coming to the market.
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• Pound Hit by Finacing Fears
  Written by Boris Schlossberg
  Last updated 1/5/2010 4:19:46 AM ET
  Pound tumbled from the start of the European open today losing more than a cent as it traded nearly 200 points lower than the highs set yesterday, after an article in the UK Telegraph suggested that UK may face a sovereign debt crisis as the year develops.
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• Planning Your Trades
  Written by Bradley Gareiss
  Last updated 1/4/2010 8:08:52 PM ET
  Why you should plan every trade before entering and how this improves your trading results.
  21 comments
• Will Dollar Pullback Be Temporary?
  Written by Kathy Lien
  Last updated 1/4/2010 5:21:09 PM ET
  U.S. equities soared to 15 month highs on the first trading day of the New Year. The rise in stocks, pullback in the U.S. dollar and the demand for high yielding currencies indicates that risk appetite dictated the price action in the foreign exchange market today. The drivers of the foreign exchange market have been as fickle as the moods of a teenager. Last month, the U.S. dollar traded primary on U.S. fundamentals but today, the dollar shrugged off positive economic data. Aside from the British pound, which has been beaten to a pulp, the dollar sold off against every major currency. It dropped the most against the Australian dollar and the least against the Japanese Yen.
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• Juice Left In EUR/AUD Collapse?
  Written by Roger Stojsic
  Last updated 1/4/2010 3:46:11 PM ET
  Having seen 500+ pip collapse over the past two weeks, the EUR/AUD has now entered waters uncharted since late 2007 when rates reached and all-time low near 1.55...
  1 comment
• Forex: Risk Appetite Reinforced by Manufacturing ISM
  Written by Kathy Lien
  Last updated 1/4/2010 10:15:16 AM ET
  Currencies and stocks are starting the New Year with a bang. On the heels of solid manufacturing data from China and an optimistic outlook for the New Decade, higher yielding currencies appreciated throughout the European trading and into the U.S. trading session.
  3 comments
• Dollar Drops At Start of New Year as Risk Flows Return
  Written by Boris Schlossberg
  Last updated 1/4/2010 5:28:31 AM ET
  Strong manufacturing data from China and UK helped to reverse an early Asian session sell off in risk FX as currency markets saw further evidence of global economic recovery on the first trading day of the new year. Data for December showed that Chinese PMI rose to an all time high of 56.1 as export demand, new orders and employment subcomponents all surged. The only point of concern was the rise in prices to the fastest rate in 17 months, sparking fears of nascent inflationary pressures.
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• Chinese Manufacturing Sparks a Rally in Risk FX
  Written by Boris Schlossberg
  Last updated 1/4/2010 4:16:38 AM ET
  Manufacturing data from Asia Pacific offered a mixed batch of results on the first full trading day of the new year with Australian numbers disappointing but Chinese PMI readings hitting all time highs. The Australian AIG Manufacturing Index printed at 48.5 versus 51.2 the period prior – its first decline in 4 months and the first time below the key 50 boom/bust line since August of 2009. The news suggests that the ultra hot Aussie economy, which has been the best performer in the G-20 universe may be beginning to cool off, although it is far too early to draw any definitive conclusions given the strength of activity in the rest of the region.
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• How Could the Dollar Trade in 2010?
  Written by Kathy Lien
  Last updated 1/1/2010 9:42:01 AM ET
  It is officially a New Year, a New Decade and we want to wish everyone the greatest success! As we look forward to 2010, many people may be wondering if the dollar will continue to strengthen. Before attempting to address this question, it is important to recognize that much of the weakness in the U.S. dollar over the past year has been triggered by the Federal Reserve lowering interest rates to record lows. The primary reason for the latest strength in the dollar is also rooted in the belief that the U.S. recovery is accelerating and therefore the Fed could implement their exit strategies and raise interest rates earlier than previously anticipated. Based upon Fed fund futures, the market is currently pricing in a rate hike by the U.S. central bank in the second half of the year. There is currently a 57 percent chance of a rate hike at the June meeting followed by an 80 percent chance of a hike in August.
  8 comments
• U.S. Dollar: Bye Bye 2009
  Written by Kathy Lien
  Last updated 12/31/2009 6:14:31 PM ET
  Within a few hours, we will be ringing in a New Year and a New Decade. Although stocks ended the last trading day of 2009 in negative territory, the dollar was mixed, extending its gains against the Japanese Yen and the euro but losing ground against the British pound.
  4 comments
• Trading Psychology- Recency Bias
  Written by Bradley Gareiss
  Last updated 12/31/2009 6:07:01 PM ET
  What is recency bias, and how can it negatively impact your trading results?
  0 comments
• Which Currency Pairs Perform the Best in the Month of January?
  Written by Kathy Lien
  Last updated 12/31/2009 7:42:33 AM ET
  With New Years Eve looming, it has been another quiet morning in the currency markets. Jobless claims are the only pieces of noteworthy U.S. economic data due for release and given that most traders are more focused on ironing out their New Year plans than banking some yearend profits, claims will only have a limited impact on the forex markets. As we turn the calendar to January 2010, we want to take this opportunity to talk about one of our favorite topics – seasonality.
  13 comments