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FX Day Trading - 16 December 2011
Swiss franc higher after SNB decision
No change to euro/franc minimum
US inflation data today
Today is apparently the favoured day for the office party, that once-a-year chance for Sunday drinkers to embarrass themselves.
The Independent reports that emergency services in big cities are preparing for an onslaught of wasted workers by setting up temporary alcohol-related injuries units "in popular drinking areas". And they are not talking about Ayia Napa or Benidorm; one of them will be positioned at London's Liverpool Street station, whence the only way is Essex.
The French look down their noses at the peculiar British practise of consuming a month's worth of alcohol at a single sitting and lying prone in the street. Across the Channel they prefer the little-and-often philosophy.
It therefore cannot be inebriation that prompted the governor of the Banque de France to call for a downgrade of Britain's credit rating yesterday, or the finance minister to denounce the UK as "marginalised".
What it could have been, however, was a clumsy attempt to divert attention from the possibility that France itself could lose its triple-A rating. The rating agencies have not made that move yet but have made clear that every country in Euroland is at risk of a downgrade if there is no resolution to the sovereign debt crisis.
Spread betting account holders have been aware of that risk for more than a week. Having become accustomed to it, and because it was no more imminent yesterday, they saw no reason to put further pressure on the euro.
Instead, they looked at the three and a half cents by which it had fallen against the US dollar since Monday and decided it was probably enough for the moment. That is not to say the euro had a good day, just that it did not have a bad one.
EUR/USD starts today minutely higher, as EUR/JPY and EUR/GBP are unchanged and lower respectively.
Its worst showing was against the Swiss franc, which opens a cent firmer against the euro this morning. Almost all that gain came at a rush after the Swiss National Bank kept its interest rate target range unchanged at 0.0-0.25%, aiming for "a three-month Libor close to zero".
The SNB also reaffirmed "its commitment to the minimum exchange rate of CHF 1.20 per euro". Investors had been geared up for some stronger disincentive, perhaps a negative interest rate or a higher minimum for the euro/franc exchange rate.
The day's economic data had minimal effect on currency prices. Euroland inflation was in line with forecasts at 3%. In the States, two Federal Reserve districts reported a worthwhile pickup in manufacturing activity: the Philadelphia index was seven points higher at 10.3 and the NY index up by nine points at 9.53.
Sterling was not punished when two retail sales indicators fell short of expectations.
Today's list covers Euroland's balance of trade, US inflation, Canadian international investment flows and almost nothing else. It being the last day of the week before Christmas, many index spread betting market participants will be tidying up their positions and doing as little as possible beyond that.
It does not necessarily mean price stability but it does mean reduced liquidity that could possibly bring strange, inexplicable price movements. Have a good weekend and watch out if you find yourself in a popular drinking area this evening.
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.
'Spread Betting Account Holders Accept Risk to France's AAA Rating', Article by Moneycorp, last update: 16-Dec-11
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