Thursday, 29 May 2014

Too Big, Too Bossy, Too Interfering

Those are the words British Prime Minister Cameron used in anger to describe the actions of the EU in Brussels.  This is in response to an European Commission demand the British must pay an extra £500M more for the additional Brussels spending.

The timing of the request is awkward, immediately following the British vote for the European Parliament.  In this election, the euro-allergic United Kingdom Independence Party (UKIP) easily beat both Labor and the Tories; the anti-EU vote and the outraged response was not confined to the UK.

National governments are furious at an increase that comes in the aftermath of EU elections victories for populist and far-Left and Right parties in Britain, France, Denmark and Greece.

Facebook Excel Markets Tweet Excel Markets Reddit Excel Markets Digg Excel Markets

Sunday, 25 May 2014

Dare We Sell the British Pound?

Ralph Shell, Excel Analyst

It was another week when the Forex Razor economic data calendar provided abundant information disclosing the status of the British economy.  Amongst the reports this week were the following; the UK CPI M/M up 0.4% better than the expected 0.3% and last periods 0.2%.  On a Y/Y basis, the numbers were up 1.8 versus 1.7% expected and the previous 1.6%. 

A subsequent report revealed the retail sales, excluding gas, which on a M/M basis was up 1.8%, expected up 0.5% and the previous period's plus 0.1%.  The Y/Y numbers were even more impressive - up 7.7% versus the expected up 5.4%, and the previous periods 4.9%.

Excel Markets May 2014 Forex Demo Trading ContestThe Q/Q GDP was a disappointment for the sterling bulls, up 0.8% versus 0.8% and 0.8%.  Still a Y/Y growth rate of 3.1% tops among the G7 members.  Trade in the GBPUSD (FXB, UUP, UDN) was down on Thursday, reflecting a report that Public Sector Borrowing was higher rather than the anticipated lower number. 

Facebook Excel Markets Tweet Excel Markets Reddit Excel Markets Digg Excel Markets

Saturday, 17 May 2014

Euro Banks on Broad Support

After the previous week's sharp losses in the EURUSD following a key reversal, we had felt the euro might be able to stage a modest recovery.  Such was not the case.  The weekly high was about 25 pips above last week's close - a feeble performance - and working toward the end of last week's trade, we are slightly under the 1.37 handle.

Economic data from the EU showed the economy was growing at a slower-than-expected rate.  The guesses for the 1st quarter EU GDP were a positive 1.1%, but the number fell short - only 0.9% higher - but still better than last quarter's +0.5%.  This number seemed to tilt the consensus toward a more robust ECB stimulus starting in June, something more specific from ECB President Draghi's.

While Germany continued to show solid growth, the French GDP fell to unchanged and the Italian GDP actually turned negative for the quarter.  For Italy, this lack of growth is a threat to the entire eurozone.

Facebook Excel Markets Tweet Excel Markets Reddit Excel Markets Digg Excel Markets

Thursday, 1 May 2014

How Long Will the USD Bears Keep Selling?

Ralph Shell, Excel Analyst

Each week we compile from the most recent COT report, a total of the net long and short positions of the major currency futures plus the Dollar Index.  These net positions are taken from the COT long form which includes both futures and options which gives a more accurate portrait of the speculators positions.

Excel Markets May 2014 Forex Demo Trading ContestAgain, and in the most recent COT report based on data from 22 April 2014, the net position of the speculators was USD longs of 132,870 contracts, in the yen and the Canadian Dollar and the DI, and USD shorts versus longs in the euro, pound, Swiss franc, the New Zealand and Australian Dollar.  The total number of the USD shorts was 127,742  contracts.  This meant the net position was a USD long of a mere 5,128 contracts.

Facebook Excel Markets Tweet Excel Markets Reddit Excel Markets Digg Excel Markets