Are they really selling short America? The U.S. Dollar is the headliner and not in a good way. The winner at the moment is the Japanese Yen as another bout of unwinding carry trades hit all markets. Between the Yen rally and the Fed Chairmanâ€™s dialogue, the U.S. Dollar didnâ€™t have a chance on Friday.
The U.S. trade balance offers a couple positive things for the Dollar but not enough to pull off a rally during Fridayâ€™s trade. A narrowing deficit should play down increasing anxiety about the sliding Dollar. Inflation fears and a weaker U.S. Dollar were noted by Bernanke as the economic results of what he called a â€œweakenedâ€ dollar, which is currently at historic lows against many currencies.
French and Italian Industrial Production readings decline for September overnight would seem to restrain the upward momentum for the time being in the Euro.
Profit taking in the Euro should only be temporary.
The Swiss Franc is clearly enjoyed the result of an ongoing flight to quality buying.
Canadian Dollar: While we donâ€™t see a definitive reason to call for a top in the Canadian, recent political comments seem to have temporarily capped off the currency. It is probably time for a profit taking correction. I think you may suspect that I am still bearish the Dollar against most currencies, but I am bullish the Yen. I believe it is time to get long. Look for a correction in the Canadian Dollar while keeping an eye on metals and oil as a key to direction.
There has been a slight disconnect between the Dollar and gold. Also in a slightly negative story overnight, it was noted that some Indian dealers were seeing disappointing festival sales, possibly due to the significant rise in stalled prices right into that critical demand window.
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. Risks include the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency and investors may lose all or more than their original investments, and the impact of such events is already factored into market prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from Brewer Investment Group, LLC or its subsidiaries and affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed.