I did not close my trades on Thursday or Friday (did not get a chance as I was busy). Hence due to oil price fluctuations USD was strong and reversed the prior day's gains. Hence I am net about 20 pips in the negative.
Let me say this:
The markets are behaving irrationally.
Weak economic data usually results in weak currency.
Further with the Feds stating that they do not anticipate raising interest rates again should have resulted in a weaker USD. But what happens....wow, has a negative effect on oil, prices of oil drops and the USD shoots up.
My personal opinion:
Current prices of oil are still due to speculative activity. This is having a direct impact on the USD as this is leading to a global recession as the global economy is now connected to the US economy in more ways than they would like.
Most mortgage backed securities are held by foreign interests. Further foreign interests own a lot of US based assets including corporations etc.
Weak dollar allows them to buy more but the returns on current holdings is soft.
Exporters to the US are suffering as US is a net importer due to a soft USD.
They all want a strong USD, but the Oil speculators have the market captured.
Hence the volatility in the near term.
With the onset of winter sure prices will shoot up a bit but then will fall again if it results in a weak dollar. Interesting times ahead.
Given the situation I have no trades for tonight, but will have signals again tomorrow.
Let me know your thoughts.....
Sunday, August 24, 2008
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment