Forex Market News
Stocks are back at the highs again in the US. Still far from all-time highs for us, we are some 22% below the 2007 levels. Like our currency, we have been in a range for 2014, between 5350 and 5550, although at the end of the week we poked through to test 5650 and closed at 5600 (this is the SPI200 futures I am looking at). UK and German stock markets are similarly placed as the US, pushing through to new highs last week, whilst the French are sailing the same seas as us.
In commodities, oil has been steadily declining since June highs of 107(ish) to last week lows of 92.50. This despite Islam burning Iraq and Putin antagonising the west in Ukraine. I noticed that the Ukrainian government announced a US$3 billion spending spree on arms….wonder where they will get that from, especially since Russia is planning to re-route the gas pipeline through Belarus???
Gold is languishing 20 bucks either side of 1300 and has been all year, whilst copper has bounced recently. Iron ore is steadily weaker and remains under 100, with BHP planning to export more despite the weaker prices. Soft commodities too, are bouncing off recent lows and all strong (+1.5% or more) on Friday.
In currencies, we have the Euro and Pound moving but otherwise its stagnation and dead set bloody boring as well as very difficult for trend traders like myself. The euro weakness we know about and expected and even traded. The sterling however, is totally uncalled for, totally unnecessary, just rude to be honest. It would seem the high prices of the cable at 1.70 was driven by speculators betting a raise in rates. Whilst they maintain an Asset Purchase Program I see it hard for the BOE to do so. I also note though that the votes at the last meeting was split 2/7 in favour of a rise. This is the first dissention amongst Carney’s ranks since he was installed in office. However, the 400+ (4 cent) drop in the cable would effectively be a rate cut to the economy, allowing further expansion in the export market. Which would bolster an argument for a rate rise. All very confusing but suffice to say, I still think the UK economy is doing well. Not as well as it was last year, but like China, it is still in good strong growth territory, which not many other economic zones can say, especially the EU or US. So, I still look for buying sterling opportunities when they present themselves.