FX closing rates Friday 01.03.2019
Currencies are bought and sold at the tone of headlines but in the end it’s the USD that stands up.
Not too bad headline data have put a bottom in the US yields around the top end of the fed funds target range.It determined the second part of the week now we have digested the Fed’s 180°, which as I discussed in our trading room is actually only a 90° if you get my drift. Doves will be doves but Powell sounded too much of a dove by obligation to me all the time.
USD ok, with the exception of the GBP, where the market has done a real 180°, now banking on a deal or at least an extension in order to get one.
It’s still dangerous, I still like to sell rallies in GBP but defining a “rally” becomes increasingly difficult. Was it 1.33 or is it going to be 1.35? I don’t know but what I do see is that an extension is not going to be necessarily positive GBP. EU is sucking the life out of UK’s businesses by the month and US didn’t really take UK under its wings in this week’s pre-trade comments. i’m not a doomsayer like all the tweeters but I do think we’re not home for GBP, even if a deal would be reached. I just don’t keep longer term positions but my finger keeps close to the “sell” than “buy ” button most of the time.
We also learned that mirages exist! CAD is the perfect example. Bid on dips 90% of the week but when money time comes, it was all a dream, or shall I say nightmare… That GDP killed every ounce of a hawkish outlook for BOC next week. CAD closed on a low without looking back, telling me we coulf have further to run into Wednesday. I’m long the USDCAD from 1.3222 in addition to short EURUSD and EURNOK.
Lastly watch out for possible weekend comments from the Chinese two weeks “workshop” starting. We have seen once more statements on trade can and will differ depending who we hear them on which side of the Pacific. Those meetings are calling for possible gaps….
Here are the closing rates and a little karaoke song( the ForexFlow Friday ritual) for you to start the weekend on a lyric note.
Stay safe, rest, do nice things with the ones you care about. See you on Sunday night