The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

 
Yesterday the British Pound was absolutely hammered, there’s no way of sugar coating it.

The fall has been attributed to yesterday’s dire business investment figures.

Billionaire investor Jim Rogers believes that Sterling could collapse within weeks.

Here’s what he said (hat tip to the FT)

“The UK Pound is on the brink of a collapse which will herald a downturn worse than 2008/9, it could well happen within weeks and the British government is powerless to prevent it.

“And this in turn will foreshadow a global economic winter that could come before the end of 2010 and make the last two years seem like a mild spring day.

“Other currencies aren’t strong and the Euro has real problems, with cracks much wider than Greece beginning to show,” Rogers continues, “but it’s the Pound that’s most vulnerable.

“In real terms, it’s already devalued against virtually every currency barring the Zimbabwean Dollar and it’s especially exposed over the weeks running up to the UK election. In a basket of currencies, the Pound is potentially a basket case. And that will put Britain in an extremely bad position for the shakedown.”

It should be noted that Rogers has been predicting said collapse for some time and while it’s certainly depreciated, it cannot be said that it has collapsed… yet.

What about his assertion that the Pound is devalued against virtually every currency?

Let’s have a look at the performance of Sterling against all major currencies since January 2008 (and the Icelandic Krona, just for comparison, I couldn’t get the Zimbabwean Dollar data)

So we can see that barring the Icelandic Krona, the Pound has devalued by an average of 1/5th, and by nearly 40% against the Yen.

The Pound has certainly been lower against the US Dollar and Euro in the depths of 2009, but now it’s reaching multi year lows against the likes of the Australian, New Zealand and Canadian Dollars.

It’s also true to say that other currencies were hit hard yesterday, like the Australian Dollar, but since 2008, it’s clear that the British Pound has been the weakest major currency overall.

For comparison, here’s the performance for 2010 so far:

Hardly a bed of roses either, with even the Icelandic Krona gaining on the Pound by 2.43%.

British Krona anyone?

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

 
Stock markets were reaching higher yesterday, but it wasn’t exactly plain sailing.

US new home sales came in below expected levels and markets looked set to sell off on another round of bad news.

However Fed chairman Ben Bernanke provided some cheer with his testimony before congress. In this testimony, he hinted that US interest rates would be unlikely to rise in the near future.

After the Fed upped the discount rate, there had been some speculation that a general interest rate hike would be coming sooner than previously expected, but these thoughts have been pushed to the sidelines now.

On the forex markets, the US Dollar sold off along with the Yen, yet the British Pound was still struggling.

Analysts and economists are divided over what the UK should do about its budget deficit at a time when the economy is still in dire need of help.

In addition, the latest political polls continue to show a narrowing in the prospects for the two main parties. More than anything, markets hate indecision and a hung parliament would certainly be cause for concern for traders.

This is perhaps best seen in the EUR/GBP, which was the top rising currency pair of yesterday, indicating strength in the Euro over the Pound.

This morning, yesterday’s optimism appears to have been short lived with markets taking a turn for the worse.

Speculation that Greek debt will be downgraded again has caused a renewed flight to safety.

As discussed over the last few days, the Yen appears to be the currency of choice for that right now. Indeed both the Euro and the British Pound have fallen heavily against the Yen with the EUR/JPY posting its lowest levels for over 12 months.

To top off today’s early moves, we’ve got an exceptionally busy economic calendar ahead.

Highlights include Bank of England governor King speaking at 09.30 GMT.

US durable goods orders and unemployment claims are at 13.30 and more from Fed chairman Ben Bernanke comes at 14.00.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

 
Early Prices Moves

For the third time this week, the early trend this morning has been a move against the US dollar and Japanese yen.

The top beneficiary of this so far is the Canadian dollar, gaining by 0.31% against the US dollar. (Also see US Dollar/Canadian Dollar Spreads).

Aside from this, the euro and pound have made moderate gains against the US dollar and yen.

The Day Ahead

After yesterday’s raft of ‘worst than expected’ announcements, traders will be hoping for some good news from today’s offerings.

We kick things off with Gfk Consumer Climate at 07.00 and European industrial new orders at 10.00.

Keep your eye on the Euro/Dollar Spreads and Euro/Yen Spreads around these times.

The big events come at 15.00 with Federal Reserve chairman Ben Bernanke testifying to congressional committee and the latest new home sales. The Dollar/Yen Spreads will be the pair to watch at this time.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

This morning has started in positive fashion with the British pound rising above today’s inflation report. The GBP/USD tops the early rises with a 0.3% rise this morning.

The euro is also making good headway against the US dollar, rising 0.25%

Other than this it’s a relatively quiet day our there today. However, unlike yesterday, there are some heavy hitting economic news items to come.

At 09.00 we have the release of German Ifo business climate and at 09.15 the aforementioned UK inflation report hearings.

At 15.00 we have US consumer confidence with a slight dip expected.

The GBP/USD could therefore be the pair to watch today.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

A couple of weeks ago we showed some tables displaying the biggest winners and losers on the forex markets for 2010.

Since then, there have been some interesting moves with a rebound in the Australian Dollar and New Zealand Dollar and an all out slump in the Pound.

The first able shows the major forex pairs ranked by the size of the move from peak to trough in 2010. This indicates the size of the moves at their extreme points.

The next table shows the biggest moves in 2010 based on current levels as of 05.30 on Monday the 22nd.

The Japanese yen and US dollar have still been the clear winners in 2010, with no other currency stepping up to move against them.

Between these two, the yen has made more ground than the dollar, but the gap certainly narrowed last week.

The euro still heads the biggest losers for the year. However the pack is more evenly spread with the British pound and Swiss franc coming in for some punishment.

The biggest turnaround has come with the Australian Dollar (AUD/JPY and AUD/USD).

Overall though, it’s been a pretty solid start to the year for the Canadian dollar (USD/CAD).

The Canadian is off by just 1.54% against the US dollar which apart from the yen is the best performance by any currency against the US dollar.

Today’s Early Forex Moves

After last week’s surprise announcement from the Fed that they would be raising the discount rate, there was a brief flurry of speculation that a general interest rate was in the offing.

No reality appears to be setting in and such speculation is diminishing. The US dollar and Japanese yen are falling back to day as a consequence.

Traders are also now interpreting the Fed’s move as being positive sign (markets can certainly be fickle).

The morning’s biggest mover is the AUD/JPY as traders recommence their interest in the high yielding Australian dollar. The euro is also making a better fist of things this morning.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

Indices And Company News

European bourses opened lower this morning following the US Fed’s decision to raise the discount rate.

The Fed’s decision weighed on the financials sector and also led to weakness in commodities and commodity-linked shares.

The FTSE 100 index got further hit by a set of weaker than expected UK Retail Sales data.

Moving into the North American open, European equities are still trading in negative territory with basic materials and financials as the worst performing sectors.

The Federal Reserve raised the discount rate to 0.75% from 0.5%, effective from February 19. (BBG/RTRS) They also shortened the typical maximum maturity for primary credit loans to overnight, effective March 18, and raised the minimum bid rate for term auction facilities to 0.5%.

The Fed said that these changes do not signal any change in the outlook for US economy, or its monetary policy, but are intended as a further normalisation of lending facilities.

Furthermore, the Fed said that the alteration is not expected to lead to tighter financial conditions for households and businesses, adding that outlook for the economy and policy remains about as it was at the January FOMC meeting.

In related news, Fed’s Bullard said he doesn’t see a high chance that the central bank will raise the federal funds rate this year. He added that the discount rate move is unrelated to the future of the main rate and he stands by the “extended period” language on rates.

Also, Fed’s Lockhart said the discount rate move is not a sign that tightening is imminent. (BBG)

Forex

Sterling traded lower for most of the session following ongoing concerns regarding the public finance situation in the UK, as well as the worse than expected UK Retail Sales figures.

Also, following the US Fed’s announcement, the USD index gained ground. However, earlier gains were pared into the European session and, moving into the North American open, the USD index has moved into minor negative territory.

In other news, the Australian central bank’s Chief indicated today he could raise interest rates by as much as 100 basis points in coming months, warning that monetary policy cannot stay expansionary as an economic recovery gathers pace. (RTRS)

Commodities

Heading into the North American open, WTI crude oil futures are trading lower after the Fed raised discount rate by 0.25%.

In gas related news:

• China’s natural gas production rose 7.7% last year to 83bn cubic meters.

In corporate news:

• According to reports, Schlumberger is in talks to acquire Smith International.
• Total said a strike affecting six French refineries and some fuel shortage depots has “intensified”. Also, French industry minister said it is out of question to close Flanders refinery.
• CGT union calls for a strike on Feb 22 at Exxon Mobile’s Gravenchon refinery in France.

On the geopolitical front:

• According to reports in NY Times, Iran worked to build a nuclear warhead. The UN added that findings by the organisation’s nuclear inspectors provided extensive evidence of “past or current undisclosed activities”. However, Iran has said that the UN nuclear warhead report is “baseless”.
• North Korea declared a firing zone off its west coast near the maritime border with South Korea.

Risk Warning: Spread Betting carries a high level of risk to your capital and you can lose more than your initial investment, it may not be suitable for all investors. Ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved and seek independent financial advice where necessary.

The above content does not constitute investment advice. Neither Online-Spread-Betting.com nor Paddypowertrader accepts any responsibility for any use that may be made of the above.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

Yesterday saw a big reversal in currency markets back into the US dollar.

This morning we are seeing a similar move back into the yen.

It seems that markets can’t shake the fears surrounding Greece and any positive moves from Monday are starting to unwind:

Also in the news today

This morning we’ve already had the latest rate statement from the Bank of Japan.

As widely expected, the BoJ elected to keep rates on hold, but also refrained from expanding its asset purchase policy. So far the reaction has been positive for the yen with big moves against major currencies.

Coming up we have UK public sector net borrowing at 09.30. At 12.00 we have Canadian inflation data (CPI), with a positive number expected after last month’s deflationary figures.

At 13.30 we have US PPI and monthly unemployment claims. Analysts are expecting unemployment claimants to remain the same as last month.

And finally, to top an already busy day, we finish with the Philly Fed Manufacturing Index at 17.00 which is expected to show an expansion in US manufacturing activity.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

It seems that indices did not want to be outdone by the moves seen on the currency markets yesterday.

Stock markets, such as the Dow Jones and the Nasdaq 100, enjoyed a huge day, nearly erasing the big losses from last Thursday.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

The Euro has dropped 10% against the US Dollar as concerns over Greek finances intensify.

The latest controversy is over a complex currency swap which masked the full extent of Greece’s budget problems at the point it entered the Euro.

Throughout the Eurozone, countries such as Germany and Holland are indicating that they will not provide a full blow bailout for Greece which caused further turmoil last week.

Is all the bad news out already? Will the EUR/USD stabilise here? Or does it have much further to fall?

The chart below shows the likely stopping points on the way down.

Here are the levels and the returns you can get using a Fixed Odds One Touch trade over the next 35 days.

A One Touch trade predicts that the EUR/USD will hit that level within the time limit.

A – $1.3500

B – $1.3000: You can get a potential return of 290% by predicting that the EUR/USD will hit this level in the next 35 days.

C – $1.2500: You can get a potential return of 883% by predicting that the EUR/USD will hit this level in the next 35 days.

D – $1.4100

On the other hand, you can get a potential return of 535% predicting that the EUR/USD will stabilise and stay within A and D. You would use a Barrier Range trade for this.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.

The Financial Fixed Odds update from David Evans, Market Analyst, BetOnMarkets.

This morning, the US Dollar is pushing higher, especially against the Euro, Pound and Swiss Franc.

Most other currency moves appear to be cancelling each other out, though overall it seems that Sterling is being singled out for punishment today. The GBP/USD is down 0.31% and the GBP/JPY down 0.12%.

Note that today is a US bank holiday so moves may be more erratic than usual.

Forex markets are fully open, but US stock markets such as the Dow Jones are closed.

This website content does not constitute investment advice. No individual contributor, contributing company, BetOnMarkets nor Online-Spread-Betting.com accept any responsibility for any use that may be made of the content.