We have certainly had a volatile few weeks in the forex market. Many of the other financial markets have also been very volatile as well, especially the dow jones. We have seen some emergency actions from the federal reserve to try and prevent a stock market crash and a recession in the United States.
The benchmark interest rate in the US is now down to 3%.
Last month I thought this may happen and wrote an article on the US Dollar carry trade. It certainly looks more appealing now. I don’t think many traders will be buying up dollars and holding them any time soon, but as always market sentiment can change very quickly.
NZD/USD, AUD/USD, GBP/USD longs are all nice positive interest carry trades. Also, EUR/USD long is also a carry trade for the first time in a few years.
Nobody really knows if the US economy will go into a recession, the fed certainly are taking drastic measures to try and prevent with rate cuts. Will it be enough? and how will the rest of the world economies be affected if the US does go into recession. All we can do is wait and see.
The Euro is looking like it may test that all important resistance point at 1.50. Possibly some time this month.
Sorry I have not posted for a while. I did very well with my trading last year, I took a vacation.
Happy to trading to all.
Pete
