Posts Tagged ‘safe haven’

Euro Trades Squarely On News

January 17, 2012 by · 4 Comments
Filed under: my paper 
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(As written for My Paper on 17 January 2012 issue. Click here to enlarge)

What a week it has been for the Euro.

Mid-week, ECB chief Mario Draghi gave a press conference, stating that the bank’s policy of extending low interest loans to financial institutions had been successful in stabilizing the region’s credit markets.

Proof of his statement was seen in the recent Spanish and Italian bond auctions, which saw solid demand for their respective paper. In fact, Spain had doubled the size of their offering.

This caused the EUR/USD to rally to 1.2879 on Friday.

However, the party came to an abrupt halt late last week when news about the S&P downgrade of top European nations hit the wire. Read more…

US Likely to Outperform Europe in H1

January 10, 2012 by · 4 Comments
Filed under: my paper 
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(As written for My Paper for 10 January 2012 issue. Click here to enlarge)

It’s good to be back in the currency market after a three week break.

For my first article of 2012, let’s take a snap-shot of the world’s biggest economies to see how they fared for 2011. This can give us excellent insight into how they might perform at the start of 2012.

According to the list by the International Monetary Fund for 2011, the top 3 economies (by country) are as follows:

1. USA: USD 15.06 trillion

2. China: USD 6.99 trillion

3. Japan: USD 5.86 trillion

Read more…

USD’s safe-haven status saves it from crashing

August 23, 2011 by · 2 Comments
Filed under: my paper, Trade Call 
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(As written for My Paper on 23 August 2011. Click here to enlarge)

Close to 8 trillion US dollars has been wiped off global equity markets since the S&P downgraded the US debt less than a month ago. Suffice to say, every trader would take this as a cue that the US dollar is weakening.

In the currency maket, the scenarios are played out slightly differently. Since we are always looking at currency pairs, we need to understand how one currency moves against another.

Interestingly enough, in the 2 weeks right after the S&P downgrade, the US dollar weakened against currencies like the Japanese Yen (JPY) and the Swiss Franc (CHF), but actually strengthened against the Aussie (AUD), Kiwi (NZD) and the Loonie (CAD).

Why is that? Read more…