For the latest FX Daily Trading Update see FX Day Trading.
FX Day Trading - 10 January 2012
Summit effect supports euro
Commodity currencies higher on confidence boost
SNB reiterates 1.20 floor for EUR/CHF
Detractors of economics dismiss it as no more than an art camouflaged by mathematics. Scientific method, they argue, should provide repeatable results.
Economics demonstrably fails to do so; if not, how could nine expert economists on the Monetary Policy Committee deduce two, sometimes three different policy positions from the same set of data?
And if economists cannot agree, what chance do the politicians have? Angela Sarkozy and Nicolas Merkel seem to be giving it their best shots but, like the members of the MPC, they are interpreting the data differently.
The president wants a financial transaction tax, hoping it will win him votes from French bankers jealous of London's supremacy.
The Chancellor wants to punish the Greeks and Italians for their past improvidence, hoping the nod to Nietzsche will win support from her puritanical taxpayers.
Both in their different ways want to preserve the single currency just as, one assumes, every member of the MPC wants to keep inflation between 1% and 3%. What a pity that they still find it so hard to agree on how to go about it.
The pair held another meeting yesterday, after which came the obligatory joint statement of solidarity and progress. The progress this time was on the fiscal compact for economic policy convergence which will, they promise, restore confidence in Euroland sovereign bonds.
The financial transaction tax will ensure that banks contribute to the cost of "the crisis they helped create". Oh, and Greece had better pull its finger out and get on with the "voluntary" restructuring of government debt, otherwise it would not receive any more bailout money.
As usual during and immediately after these summit meetings forex spread betting investors felt obliged to buy the euro. You never know, they say, this might be the breakthrough for we have been waiting these past two years. Typically the enthusiasm peters out after a couple of days.
For the moment, however, the tête-à-tête in Berlin has been enough to pull the euro out of its power-dive, allowing it to add a quarter of a yen and half a US cent and to avoid further erosion against the pound. A side effect of the optimism was a boost to the commodity dollars, all three of which had a good day.
There was a moment of high excitement for the Swiss franc when the Swiss National Bank announced that its chairman Philipp Hildebrand would indeed resign because of a questionable dollar/franc trade by his wife.
Financial spread betting investors’ knee-jerk reaction was to test the SNB's defence of its self-imposed 1.20 floor for EUR/CHF. In the event, the attack lasted less than five minutes and failed to get within a cent of its target. An SNB spokesman subsequently reiterated the Bank's commitment to the 1.20 floor and the market backed off.
Monday's exclusively second and third-tier economic data passed without comment. Overnight figures from the BRC and RICS delivered better than expected assessments of UK retail sales and house prices, which might have a positive influence on sterling when London gets going.
Other than French industrial production and US wholesale inventories, there are no other ecostats on the list. Perhaps it will be another quiet day.
Currency Trading and Spread Betting carry a high level of risk to your capital and you can lose more than your initial investment, they 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, it is provided purely for information purposes and is delivered as a personal view of the writer. Neither the contributing company (or writer) nor Online-Spread-Betting.com accepts any responsibility for any use that may be made of the content.
'Forex Spread Betting: Optimism on EU Summit Boosts Commodity Currencies', Article by Moneycorp, last update: 10-Jan-12
Related articles:
FX Day Trading, 18-Apr-12,
Daily FX Trading updates covering the influences on the key FX markets. Daily updates include key FX market movements and features the Dollar, Pound, Euro and Yen as well as...see: FX Day Trading
FX Day Trader, 17-Apr-12,
A daily review of the currency markets concentrating on the major Dollar, Yen, Euro and Pound Sterling markets...see: FX Day Trader
£1 per point: Start trading £1 per point/tick & an initial deposit of £30
Multiple markets: Forex , Commodities, Indices & Equities
Risk Warning - Spread betting carries a high level of risk to your capital & you may lose more than your initial investment. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seek financial advice where necessary & make sure spread betting meets your investment objectives.
(1) The FTSE Rolling Daily Spread is 1 tick during market hours & 4 ticks out of hours. 1 Tick is defined as a full FTSE point. See our Product Information for more details. (2) The above information is correct at time of writing. (3) Tax Law can change.
FinancialSpreads.com is a trading name of London Capital Group Ltd which is authorised & regulated by the Financial Services Authority (FSA). Registered address: is 4th Floor, 12 Appold Street, London EC2A 2AW. All information correct at time of publication.
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.
Disclaimer:
Online-Spread-Betting.com does not endorse the information and
analysis available on this site. It is provided purely for information
purposes and is delivered as a personal view of the writer. Under no circumstances
is the information hereon to be used or considered as, an offer to sell, or a
solicitation of any offer to buy. The website content does not constitute investment
advice and neither the individual contributor nor Online-Spread-Betting.com accepts any
responsibility for any use that may be made of the content.
* Tax Free Trading:
Tax law is subject to change. It may also differ if you pay tax in a jurisdiction outside the UK.
