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Last few weeks brought an increased interest in both inflation and deflation in context of currencies. Since late 2007, the U.S. has cut its benchmark overnight lending rate by 5 percentage points to 0.25 percent. The UK dropped its rate by 5.25 percentage points to 0.50 percent. Many other countries sit at or near zero interest rates. And the Eurozone followed, even if slowly, pushing rates down from 4.25 percent to 1 percent ? and its key deposit rates down to near zero.
Strangely, after these aggressive rate cuts and other efforts by central banks to pump money into their economies and despite all of the talk about the Fed's plans to deal with future inflation, deflation is becoming the problem, not inflation.
As reported by some countries, most recently Japan, deflation is becoming measurable. fear is, that any more of it will slow down or kill any on going recovery, pushing global economy deeper into recession. This subject will be coming up more often over next few months. Right now opinions are varied as to how will currencies be effected. We will join this debate soon.
With July at an end, we updated are complete results pages, including performance graphs. Most recent results are posted below, and link to more data is provided.
(Sunday 08.03.2009).
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Here are the results for last week:
- Daily Pound made 31 pips ;
- Daily Euro gained 17 pips;
Follow the link on the right to view details.
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Last week's results.
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After some extended wait our trade in USD-CHF finally happened. Price has turned in our direction and we managed to capitalize on it. Trade worked out exactly as planned, for 143 pips gain. Interestingly, price collapsed soon after the target was met.
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Well, our other trade from last didn't work as good. In fact, it didn't happen, with price moving against us. No problem, we are simply moving the entry order again. Pair is AUD-USD and we want to sell it at 0.8236, with an objective of 0.8135. Maybe soon.
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Last few months Swiss National Bank has been either talking about intervention in the open market, or doing the deed. It has been quiet on the subject recently, because CHF has been weakening nicely. Nicely for SNB, that is, since this has been their objective. On Friday Swiss Franc strengthen suddenly, which we think is temporary.
We don't expect SNB to step into the market, this trade is technical not fundamental, but its better to be on the side of central bank.
For this we are choosing EUR-CHF. We already bought it around the close late on Friday, at 1.5235. We seek about 100 pips here or a retest of latest high.
We wish everybody great trading week!
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Once again we must stress that the trades highlighted here are only a small sample of our trades. If you have any comments or would like to obtain more information please contact us at info@spectrumforex.com .
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Risk disclaimer:
Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets. Don't trade with money you can't afford to lose. Nothing in our website shall be deemed a solicitation or an offer to Buy/Sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.
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