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FX Day Trading - 30 December 2011
UK house prices rise in 2011
Just
No other ecostats today
A royal wedding, a spat about Greece and the EU, Rupert Murdoch, riots in London, an Ashes win for England, a TV series based on a country house and Hosni Mubarak; all made the news in 1981, just as they did in the last 12 months.
Currencies were big news back then, too. The US dollar was on its way to a record high and the pound was under pressure. In the intervening years much water has passed under the bridge but a recurring theme has been the vulnerability of sterling, and not without reason.
Over those three decades the pound has fallen by a net -20% against the US dollar, -33% against the euro, -71% against the yen, -45% against the Canadian dollar, -10% against the Aussie, -14% against the NZ dollar and by -58% against the Swiss franc. Yet Britain still has a trade deficit.
So much for the idea that a weak currency promotes exports. Whatever Japan and Switzerland are doing right to promote trade, it is certainly not the competitive devaluation of their currencies.
The yen and the franc both had another good day yesterday, though neither they nor any other currency went very far. Movement was generally limited to half a cent and there was no apparent effort to repeat the drama of Wednesday, when the GBP/USD and the EUR/USD took an unexpected hit.
Even a disappointing Italian bond auction was not enough to excite spread betting investors.
The Italian treasury had been hoping to build on the success of its bill auction the previous day to refinance an €8.5bn mixture of maturing debt, the longest being for 10 years. In the end it managed to offload €7bn, with the 10-year yield coming in a whisker under 7%.
The 6.98% achieved was better than 7.56% Italy had to pay for 10-year money at the end of November but the low coverage and the still-uncomfortably-high yield did not bode well for the €450bn it will need to borrow in the next 12 months.
Thursday's economic data, all from the States, showed a worthwhile 7.3% monthly increase in the number of pending home sales and a slight increase in the weekly number of jobless claims.
The Chicago purchasing managers' index (PMI) was almost unchanged at 62.5. Overnight HSBC's PMI for the Chinese manufacturing sector was a touch lower at 48.7.
Apart from German retail sales and Italian producer prices the only item on today's agenda is the Nationwide UK house price index, which has already been released.
Despite slippage of -0.2% between November and December, "UK house prices edged up by 1% over the course of 2011." Nationwide's outlook for 2012 is for "low levels of activity once again, with prices moving sideways or modestly lower".
And that forecast is as good as any for the FX spread trading market today.
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 Markets Remain Cautious Despite Failed Italian Bond Auction', Article by Moneycorp, last update: 30-Dec-11
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