THE TIPSTER
WITH currency wars high on the agenda at the G20 meeting this week, Barack Obama may face attacks over the Federal Reserve’s quantitative easing policy. The dollar-yen pairing could be particularly worth watching, as Japan explicitly intervened in the foreign exchange market only a few months ago. Trading continues at around the ¥80–¥81 area, but spread betters are eying a break through the ¥80 level. Spreadex offers a spot spread of ¥80.60–¥80.63 on dollar-yen.
Since breaching parity with the greenback, the Australian dollar has just kept on fighting its way up and it seems to show no sign of relenting. The next big hurdle for the Aussie is $1.0205. Capital Spreads offers a spread of $1.0164–$1.0166.
Renewed worries about the solvency of Eurozone economies have weighed on the euro in recent days. Bond yields have shot up in Ireland and Portugal. The euro has fallen across the board but especially against sterling. With the Bank of England’s inflation report due out on Wednesday, it will be interesting to see whether or not the pound can sustain its recent gains against the euro. CMC Markets offers a spread of £0.86315-£0.86333.
Indeed, the pound has been doing well against the yen recently too, or at least better than the dollar. After lows of ¥127, sterling rallied to ¥132 and is in a solid uptrend channel. Yesterday’s pullback to the 30 day moving average and bottom of the uptrend channel at around ¥130 was a good opportunity to get long and hope for ¥132-¥135. Spread Co offers a spread on sterling-yen of ¥130.21–¥130.29.
And if it does well against the yen, sterling should also do well against the dollar. Spread betters have been anticipating further gains in sterling-dollar and many are hoping for a return to the nine-month high of $1.6300. ShortsandLongs.com offers a spot spread on sterling-dollar of $1.6159–$1.6162.