Yuan Sets High Against Dollar
With pressure from the U.S. on the Chinese, the Yuan set a high against the Dollar yesterday. This may just be a veiled gesture to the U.S. If it really meant anything, shouldn’t the Yen and other Asian currencies been boosted?
Yuan Sets High Against Dollar
Actual Consumer Confidence 98.9
I was close with my estimate. I’m profiting from that guess as I write this with 3 short EUR/USD lots.
Consumer Confidence Report Here
My Consumer Confidence Guess 96.5
The consensus forecast for the 10:00 am U.S. Consumer Confidence report is 90.0. I am going to make an educated guess on what I think the announcement will bring. In November 2004, Consumer Confidence was 85.0. It seems like the consensus has typically been conservative with their expectations therefore with this information and the fact that I can obtain a gallon of gas for just over 2 bucks, I’m going to predict that the Consumer Confidence for November 2005 will be 96.5.
November 22nd CFTC report released
CFTC report was released today due to Thanksgiving holiday. No flips this week compared to last. Interest in the USD increased a bit. Check out Forex Volume
Inside the Numbers: Volume 2
This information may be known off the top of one’s head if you are a professional trader but not to me:
Currency pair with greatest interest rate differential: NZD/JPY (7.0%)
Currency pair with smallest interest rate differential: GBP/USD (0.5%)
Interest rate differentials:
| Currency Pair | Interest Rate Differential |
| EUR/USD | -2.0% |
| GBP/USD | +.5% |
| USD/JPY | +4.0% |
| USD/CHF | +3.25% |
| USD/CAD | +1.0% |
| AUD/USD | +1.5% |
| EUR/GBP | -2.5% |
| EUR/CHF | +1.25% |
| NZD/USD | +3.0% |
| EUR/JPY | +2.0% |
| GBP/JPY | +2.0% |
| CHF/JPY | +.75% |
| GBP/CHF | +3.75% |
| EUR/AUD | -3.50% |
| EUR/CAD | -1.0% |
| AUD/CAD | +2.5% |
| AUD/JPY | +5.5% |
| CAD/JPY | +3.0% |
| NZD/JPY | +7.0% |
| GBP/AUD | -1.0% |
| AUD/NZD | -1.5% |
China’s too-hot economy is prompting firms to look elsewhere to invest
There is an article in the November 28th issue of Newsweek about China’s imminent slowdown due to overproduction, zero margins, and overdependence on the US consumer. It was actually a surprise to me that investors were pulling money out instead of in.
Today in a Nutshell
Fed in November wondered how to say "enough" on rates The Fed was unanimous in November, but some were concerned over the risk of tightening too far.
Merkel Elected as Germany’s First Female Chancellor
Stocks move lower as crude oil heads $1 higher, investors nibble at profits
Manufacturers urge harder U.S. stand on China yuan
CFTC Committment of Traders Report
The CFTC COT report was released today and data processed. See Forex Volume
There isn’t anything new to report. Positions still remain in favor of the USD.
CFTC report release yesterday
The CFTC report was released on Monday instead of Friday because of the holiday. I just got around today to updating. There was a 16000+ increase in short positions in the EUR flipping from net long to net short. If you remember, the previous week, there was a flip from net short to net long.
Other points of interest may be that the Swissie increased open positions by 13222 from the previous week, with 13084 being short positions.
From the last 2 weeks, forex futures volume may indicate the following:
CAD : positive; still strong favor for Canadian Dollar
CHF : negative; increased short positions
GBP : negative; no major movement in futures volume over last 2 weeks
JPY : negative; no major movement in futures volume over last 2 weeks
USD Index : positive; minor growth in long positions over last 2 weeks
EUR : negative; flip from net long to net short over last 2 weeks
AUD : negative; a slight increase in open positions
Ouch: Buffet get’s bitten by Forex
Here’s an interesting article from the Wall Street Journal about Warren Buffet and the difficulty with taking up forex positions based on fundamental economic analysis alone:
From the Wall Street Journal
"In the early 1920s, John Maynard Keynes attempted to apply his economic views to speculation in the foreign-exchange markets. Though Mr. Keynes was nearly bankrupted by this experience, he learned a valuable lesson: It is difficult to earn money in forex markets from taking positions based on fundamental economic analysis. Recent losses from shorting the dollar suggest Warren Buffett is receiving a similar lesson.
