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FX Day Trading - 19 December 2011
FX market winds down for the festivities
Major currencies unchanged
ECB president to speak this evening
The European Union faces a tough job of finding someone to take the legislative helm.
Chancellor Merkel would willingly take on the responsibility but at least 24 other heads of government would object. So the thorny problem of what to do about the sovereign debt crisis rumbles on.
They have not given up though. Even as Plan E was being honed in Brussels, Herman Van Rompuy was telling journalists there would be another summit meeting next month, presumably to discuss Plan F.
Not that spread trading investors seemed to care one way or the other. The euro celebrated the upcoming meeting with a short-lived spike but soon settled back into its pre-Christmas rut. Since Friday morning it, and the other major currencies, have gone nowhere.
The pound, the US dollar, the yen and the euro itself start today at levels almost identical to those at which they opened on Friday. Even the movers have not moved far; the Canadian dollar has lost a cent and the Aussie about half a cent.
The USD/CHF is half a cent firmer, having built on the lack of action by the Swiss National Bank on Thursday.
Friday's ecostats added nothing to the debate. Euroland's €0.3bn trade surplus in October was close to forecast, as was America's 3.4% inflation rate. Overnight, New Zealand business confidence slipped by a point and a half to 16.98 and Rightmove's UK house price index fell by -2.7% in December.
Yet to come are Euroland's current account and construction output, Canadian wholesale sales and America's NAHB housing market index.
Of more interest than any of those will be European Central Bank President Mario Draghi's speech to the European parliament's Committee on Economic and Monetary Affairs at teatime.
At the end of last week he said, for at least the second time, that the Bank would not exceed its mandate by stepping up its purchase of Euroland government bonds. He clearly hopes somebody will, though.
Speaking of the unlimited three-year loans the ECB will offer this week to the zone's commercial banks, he said "One of the things that they may do [with the money] is to buy sovereign bonds." Sig Draghi is nothing if not an optimist.
With four and a half days to go before the long weekend, financial spread betting markets will continue the wind-down they began on Friday. The usual rules apply: if anything needs to be done on the currency front, do it.
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.
'USD/CHF Spread Betting Market Rises on Swiss National Bank Inaction', Article by Moneycorp, last update: 19-Dec-11
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