Will the Swiss Franc Continue to Gain in Currency Trading?

Risks to the Swiss franc rally

One of the best performers this year on the FX market has been the Swiss franc. It has everything going for it: traditional safe haven status and an expanding economy with inflation kept under wraps.

However, the Swiss franc may not see such progress as the year comes to a close, and as European sovereign debt issues come up again. GFT’s Boris Schlossberg lays out the challenges in FX360:

However, if EZ growth begins to wane into the end of the year while at the same time EZ sovereign debt concerns return, accelerating the fall in EUR/CHF the economic picture for Switzerland may no longer look so benign as the country’s critical export sector could face a much more challenging environment in 2011.

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• Swiss Franc in Currency Trading
  Currency trading on the FX market

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U.K. Pound Still Has Struggles in Forex Trading

Sterling in currency trading

The U.K. pound is still struggling overall in forex trading on the currency market. Earlier today, sterling saw a sell off in currency trading.

However, for now, the U.K. pound appears to be doing better. The better than expected payrolls data out of the U.S. appears to be helping high beta currencies as risk appetite returns.

But it may be a bit premature for a celebration on behalf of the sterling. GFT’s Boris Schlossberg reports in FX360 that the U.K. pound is still vulnerable, even with today’s boost on the currency market:

As we noted yesterday, “The UK economy remains very vulnerable to the triple threat of declining house asset prices, weaker capital markets and the onset of fiscal austerity measures as we enter the fall season.”  Given these dynamics the 1.5000 level in GBP/USD could be breached within the next few weeks.

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• Economic News and Currency Trading
  Forex trading on the currency market

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London Session - September 3, 2010 8:16 AM

Currency markets are relatively quiet as traders are on the sidelines ahead of the key US employment report. The usual safe havens, the Swiss franc, Japanese yen and US dollar softened slightly as the rally in risk continued overnight. Asian stock markets extending gains and the Nikkei 225 advanced for the third straight session with a gain of +0.57%. European markets are trading mostly positive as of now. The main focus today is on the August employment report and specifically what the private payroll change will be (government Census related layoffs are expected to be about 115K). While the market is anticipating a loss of -105K jobs on the headline number, private payrolls are expected to show an increase of 40K. It appears that the risks are to the upside. Full text »

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Asia Session - September 3, 2010 1:07 AM

With US employment data looming in the not so far future as well as the three day weekend in the US, markets were calm and collected in range bound trading to end the week in Asia. Better than anticipated US unemployment data, (472K vs. 476K) and pending home sales data, (+5.2% vs. -1.3%) helped to boost risk and keep stocks lofted for the second day in a row. This mood carried over to Asia where stocks had modest gains, and risk remained level in a session that was almost sleep inducing as is the case ahead of big US data releases. Tomorrow’s Non Farm Payroll data is forecast to come in at -101K jobs lost, down from last month’s -131K lost. The unemployment rate is projected to increase from 9.5% to 9.6% as well. Full text »

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New York Session - September 2, 2010 4:08 PM

Risk continued to advance as U.S. stock markets extended yesterday’s gains, however the dollar traded relatively flat. This morning saw initial jobless claims decrease to 472K from the prior week’s 478K which was slightly better than the expectations of a 475K print. 2Q final nonfarm productivity softened to -1.8% from the prior -0.9% and July factor orders were released at +0.1% from the prior -0.6%. Pending home sales for July surprised to the upside with a rise of +5.2% from the previous month’s -2.8% (cons. -1.0%). On balance, the mix of economic data was viewed as a positive for risk. The reaction was somewhat muted however as investors await tomorrows employment report. Full text »

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FX Trading Surge

Daily currency volume Boris Schlossberg, director Of currency research GFT.

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Euro Maintains Gains in Forex Trading

Dollar weakness on the currency market

The euro is maintaining its gains in forex trading on the currency market today. The ECB announced that it is keeping interest rates steady for now, and forex traders expect Jean Claude Trichet to announce that liquidity measures will remain in effect through the end of the year.

U.S. dollar weakness is as much to blame as euro strength, though. Economic news out of the U.S. recently has not been of the kind to help strengthen the greenback on the currency market, and forex traders have been anxious to go elsewhere.

It will be interesting to see how EUR/USD does after the release of more U.S. data, and after Trichet’s policy announcement later today.

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• Euro in Forex Trading
  Trading on the currency market

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U.S. Dollar Continues to Soften in Forex Trading

Greenback in currency trading

The U.S. dollar continues to soften in forex trading on the currency market today. Indeed, the U.S. dollar is mostly lower, dropping against the euro, yen and Aussie.

Against the sterling, though, the U.S. dollar is slightly higher. Sterling appears to be underperforming, especially in light of some evidence that Britain may be ready to move into economic recovery.

Emerging market currencies are still receiving a bit of help from yesterday’s announcement of positive manufacturing data out of China, and that is contributing to dollar weakness. The forex trading forecast indicates that dollar weakness could continue for a little longer. But markets are volatile right now, and it is difficult to tell how forex traders will react to different bits of news.

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• Looking for Currency Trading Clues
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London Session - September 2, 2010 8:03 AM

Markets consolidated after yesterday’s surge in risk with the dollar trading softer ahead of key events. While the ECB’s rate announcement is not likely to have a profound impact as the bank is widely expected keep rates at their current level of 1%, the press conference to follow may stir the markets. We will be looking for ECB President Trichet to address the bank’s decision on lending facilities as well as provide an updated economic forecast. The U.S. labor situation is back in focus as investors seemingly disregarded yesterday’s negative ADP employment number amid a wave of better than expected data. The ADP print of -10K from the prior 37K was the first negative reading since January of this year. It is also of note that weekly initial jobless claims remain at elevated levels with the 4-week moving average at the highest level of the year around 486K. Foreshadowing by the disappointing ADP print and heightened level of weekly claims may not be a good sign for Friday’s job report.   Full text »

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Asia Session - September 2, 2010 1:19 AM

The US Dollar weakened slightly today in Asia against the yen, but conversely firmed slightly against the majors in what was a quiet trade session. Upbeat US manufacturing data helped to propel equities higher which carried over to the Asian session where stocks were mostly in the green for the day. Despite firmer equities, risk softened a bit after the morning saw a boring display of tight ranges in most currencies. USD/JPY fell to lows just shy of the 84.00 big figure as traders remained cognizant of the potential of the BoJ intervening in the currency markets. With a battle for the Japanese Democratic Party leadership around the corner, investors feel that a drastic move could be in the cards for current leader Naoto Kan in order to help solidify his position. Challenger Ichiro Ozawa has made it clear that he is not afraid to pull the trigger on yen intervention if needed. Full text »

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