Running Market Commentary - FED ANNOUCEMENT Sept 16
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I believe persistant problems in the housing / credit markets and their impact on global economic growth will continue to cause volatility in the FOREX Market over the near term. It may take some time for these current persistant issues plaguing the currency market to work themselves through the system. Even though all these problems feel like the end of the world, I believe this is the best medicine for every market. Also, there is going to be a once in a lifetime buying opportunity in US Stocks in the near future, so keep your eyes open.
Today, the FOMC will be meeting at 2:15. It seems that the market has already priced in a 25 basis point rate cut, and a 15% chance of a 50 point cut. I DO NOT believe this is the right thing to do at the moment, but I am not here to fight the market, just to interpret where it's going. A 25 point rate cut may be too small to help the markets. A 50 point cut may raise too many eyebrows and people will worry that the Fed sees another downturn coming.
The current moves in the FOREX Market has been tremendous. My 70 pip STOP LOSSES have no chance in this market. This BLOG does not help BBFX's clients out if I am putting out market orders, so I take my time and try to convey enter orders that we all have a chance of obtaining.
Some of my thoughts are to 1.) SHORT GBP / USD on any spike up because the BoE will have a ton of cuts to make in the future, 2.) SHORT EUR / NOK and to SHORT CHF / NOK again. Other than my thoughts, I am staying on the sidelines until the markets become more clear.
My only position SHORT CHF / NOK from 4.9800 and it is trading at a loss at the moment (5.2500). Remember, the 27 big fig loss isn't as bad as it seems, NOK converts at 5.8800 so, basically, we re down roughly 4 US big figs. We are moving in on 3 months worth of swaps to curb a lot of the loses.
Please feel free to comment on this piece with questions, comments, or your own analysis.
Rich