Euro/USD: Euro is again under pressure from external background

Forex analytics: At the Forex currency market, the pair EUR/USD is traded being under pressure on Monday.
By 9.00 Moscow time the Euro is at 1.4084 against closing level of 1.4118 in Friday.
The next series of sales of the Euro was caused by the news about the arrest of the Managing Director of IMF Dominique Strauss Khan due to which even the meeting of the Fund was also postponed.
Moreover, concern about ...

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Greece's Credit Rating Gets Downgraded Again

The euro plummeted on Monday after rating agency Standard Poor's downgraded Greece's credit rating. Greece's rating fell by two levels to B and will be kept on a negative credit watch. The single currency continues to be under pressure weighed by a rumor saying that Greece is considering leaving

AUD: Australian Dollar goes down after reaching highs once again

Forex analytics: The Australian Dollar goes down at the Forex currency market on Monday after reaching new highs at 1.1014 and due to the decline in interest to the high -yielding currencies at the beginning of the week.
Forex forecast: MACD indicator is in the positive area for the pair AUD/USD and goes up due to high trading volumes, giving a pair buy signal. Stochastic Oscillator remains in the overbought zone ...

GBP: British Pound is on sale again

Forex analytics: At the Forex currency market the British Pound Sterling rate continues to decline on Tuesday, keeping on the trend of yesterday.
Forex forecast: MACD indicator is in the positive area for the pair GBP/USD and is growing, maintaining a pair buy signal. Stochastic Oscillator is going to come out of the overbought zone, starting a pair sell signal.
Forex recommendations: off the market.
Feasible ...

Trade Idea Wrap-up: EUR/USD – Look to buy again lower

The single currency found renewed buying interest earlier today just above the Ichimoku cloud bottom at 1.4762 and has resumed recent upmove in line with our expectation (our long position entered at 1.4785 met target at 1.4885 with 100 points profit), further gain towards 1.4955/60 (50% projection of 1.4494 to

China Raises Interest Rates Again; Markets Charge On

So what exactly is driving markets onwards these days? Certainly, China`s third hike of interest rates since the beginning of the current cycle should ring alarm bells for all but the most hallucination-prone members of the bull camp. Isn`t it Chinese purchases driving commodity prices higher? Isn`t it cheap Chinese products that keep the cycle going for those like Japan and the U.S., whose companies and consumers would get a severe shock if the Chinese workers were able to demand the just rises in pay that they deserve? And isn`t the Chinese banking system the third pillar of the global bubble, ensuring that even the craziest "investment" ideas will get funded? These and many other Chinese factors should make any believer in the bull phase extremely cautious and nervous about where the market is headed, including those brave souls who are brave enough to ignore the turmoil in the geostrategically pivotal Arab World, or the explosive E.U. But no, nothing matters for some except for cheap dollars and the same old game of borrowing to speculate, and that the Fed rules all.

The PBOC has raised its benchmark from 5.81% to 6.06% in response to inflation reaching the highest levels of the past 3 years. Chinese inflation has hit 4.6% in December as most readers of the blog would know, but it is a lot lower than the situation in much of the emerging market world. Put simply, there is too much money gushing in to these places and too little enthusiasm from central banks to combat the inflows through capital controls or interest rises. The outcome is rampant inflation, but inflation is probably the least of the ills that the discrepancy between advanced economies and the developing world will bring about. Above all, we have the boiling speculative bubbles that stretch all over the world from Turkey to South Africa to Israel and of course China. Bubbles characteristically end with rate rises (recall the gold and commodity bubble in late 70s that was killed by Paul Volker, or the stock market bubble in 2000 that was popped unwillingly by Alan Greenspan). If inflation causes interest rates to come higher, and causes these bubbles to pop, we may well have the worst economic disaster of the post-WWII era in a collapse that may well dwarf anything we experienced during the banking crisis. Because that one has been made to spread to all segments of the world economy by the experiments of central banks.

Commodities and EM stocks are the only ones for now to experience the reaction of the markets to the Chinese decision. We do not expect even gold to come unscathed if the Chinese keep tightening to perhaps as high as 10%. While that is a distinct possibility, we do not think that the PBOC will risk pushing the brakes too hard, as China will be one of the hardest hit when their engineered bubbles explode.