Tag : G20

Mulder FX Update II

Posted by Byung Koo at 9:14 pm

NEWS Alert:

Dear clients,

We’re heading to our first negative performance month-on-month! And immediately to a big drop. May isn’t over yet and also the markets are extremely, extremely volatile but out of the woods, won’t happen.

Right now our performance dropped -26% and of course depends on when your startdate is, it could be higher.

I don’t expected that the U.S dollar rally against all other major currencies. Only with tight money management in the past we could hold this current positions. A further rally in the U.S dollar before a correction won’t help our performance. We need a revovery in EUR, GBP, AUD and some other currencies.

So clients are don’t take any open postions more, because the have a margin call of 3.5% or below. We don’t want to hit the margin call of 1%.

These volatile times gives also us a insight of what kind of movements FX could have.
Account Balance will change very rapidly, mostly down the last week but hopefully a recovery in the next weeks.

Feel free to ask your questions. Our email is: info@mulderventure.com

Best regards,
Byung Koo Mulder
CEO of Mulder Venture BV

Forex Trading: EUR/USD 2010

Posted by Byung Koo at 12:01 pm

In 2009 the U.S. Dollar dropped against other major currencies. From safe-haven currency to carry trade currency. From 1,2450 in March to 1,5150 in December. Back to 1,25 in 2010 it won’t happen I guess but only way for the U.S. Dollar is up against the euro. My prediction for end 2010 EUR/USD is 1,35.
Reasons for this, the FED is no longer implementing quantitative easing. Economic growth in the United States is likely to have a positive impact. EU suffer of deficit problems in more countries in 2010. Volatility in financial markets(mostly down) will investors boost the dollar.

For long term investors in currencies:
Short levels
1,4698, 1,4845en 1,5034
Buy levels
136,54, 1,3350, en 1,3152

GBP/USD near critical levels, what to do?

Posted by Byung Koo at 11:23 pm

The British Pound fell considerably for the second consecutive day of trade, closing below important support at its 200-day moving average and leaving overall momentum firmly to the downside. A disappointing revision to Q3 Gross Domestic Product growth did the bulk of the damage, while a later US Dollar rally only exacerbated the GBP/USD decline. The UK Office of National Statistics reported that the economy shrank a more modest 0.2 percent through the period—better than the initially-reported -0.3 percent change but worse than the consensus -0.1 percent move. Given that the UK is one of the few major world economies that failed to recover through the third quarter, the GDP disappointment only served to worsen investor outlook on the British economy and currency. Traders should subsequently be on the lookout for today’s key Bank of England Minutes release. The last several BoE Minutes have shown substantial currency volatility given surprise votes on key measures, and today may be no exception.

The potential for the economy to emerge from its recession in the final quarter of 2009 has raised expectations that the BoE will bring an end to their asset purchase program and look toward tightening. The shortening time frame for a rate hike has increased U.K. interest rate expectations in determining GBP/USD price direction, which is currently explaining 32% of volatility compared with 19% a week ago. However, risk appetite has also seen a rise in its influence from 28% to 43% in the past month, but that relationship has shown signs of warning over the past few days which increases the importance of today’s BoE minutes release.

Today’s release of the MPC minutes from their last rate decision will give insight into the timeframe for the beginning of tightening. The central bank didn’t add to their asset purchase program in December and following the month’s prior split vote on additional measures, it will be interesting to see where the votes fell this time around. If members are still calling for more quantitative easing then the outlook for interest rates could sink and drag the pound lower. A unanimous vote and optimistic rhetoric from policy makers should raise the potential for future rate hikes and provide sterling support. Service sector and housing data will also be released and could influence sentiment.

Key support level is 1.5800-1,5850 but will be hold or break? Will be hold, GBP/USD still in range 1,5800-1,5850 and 1,6756(first blue line). I don’t want to talk about will it break 1,58 than GBP/USD could drop very fast to next support level 1,5160(orange line)!

Mulder Currency Fund have no open positions right now in GBP/USD but one small order to buy GBP/USD on 1,5825 with stoploss order on 1,5750. In a thin market like this week, we could see big movement after BoE minutes today. If the order will be filled, target short term(1-2 weeks) is 1,62 to take profit. So we could lose around 600 euro’s or win more than 2000 euro’s. Order is lot size 100.000 USD and with a leverage of 100. A small order Mulder Currency Fund have an amazing half year behind, with a performance of more than 300% within 6 months so these days you don’t trade big. Next year a lot of opportunities and we expect high volatility in currency pairs.

G20 Comments on Currency Prices

Posted by Mulder Venture at 4:13 am

In the aftermath of the G20 meeting it seems that policy makers are still clearly disturbed about the state of exchange rates. In the last few days we have heard choirs of high profile complaints against currency strength. With the EURCHF trading around the 1.5100 level, markets should be focused on the recent SNB comments, which forcefully defend action (not a “beggar-thy-neighbor” strategy) while staying committed to their current interventionist policy.In Canada, BoC Governor Carney reiterated that long term persistent strength of the CAD would be negative for the Canadian economy and prolong soft inflation figures.

While yesterday ECB’s Trichet and Nowotny both said a strong USD is “important” for the global economy. Perhaps the most interesting, while confusing, would be the comments from Japan. Overnight new Minister of Finance Hirohisa Fujii seems to be backtracking from recent comments and now has expressed some displeasure at JPY moves but also declined to commit to intervention, stating the market had twisted his earlier statements. In the last 24hr Fujii has said “We are watching FX moves closely” and “FX intervention is possible under extreme circumstances.”

On the other side, Prime Minister Hatoyama stated that the JPY rise is already hurting small companies, hinting that the new government will probably not permit the Yen to appreciate forever. Sounds like the historical goverment policy of a weak JPY is returning.

These comments have created considerable distortion in the FX markets and traders would be advised to watch out for continued verbal intervention. Wall Street was able to close on a high note and for the most part Asian regional indexes follow (lone exception Shanghai -0.21%). The rally in risk appetite feels light with only a slight rebound in risk correlated trades. Yesterday’s economic calendar was light, while today we have couple of releases, which could move the markets. The UK Q2 GDP turned out to a nonevent, printing at -5.5% y/y vs. -5.4% exp, -0.6% q/q vs -0.6% exp.

And from the Eurzone September’s increase in economic sentiment to its highest level in a year is another good sign that the domestic economy continues to recover. Economic sentiment, jumped to 82.8 from 80.8 , a touch higher than expected . From the US we’re awaiting S&P/Case-Shiller Composite-20 Y/Y Jul house price index and the consumer confidence for September.

Risk Aversion Leads Equities Lower, USD Higher

Posted by Mulder Venture at 2:37 am

A new week begins and risk aversion is the dominant driver of FX markets. The broad USD move lower began showing signs of fatigue last week, and after some disappointing US data (durable goods orders, existing/new home sales figures); the markets have reined back their longs in commodities and risky assets.

Gold is having to re-familiarize itself with three-digit prices (trading at $988 vs. highs last week around $1020), and crude oil is down over 8% from this time last week after US inventory numbers last week revealed a glut of crude and gasoline supplies. The euphoria of global recovery always felt slightly overdone and now it seems markets have snapped back to reality somewhat. P/E ratios for the S&P show equities are still expensive; trading around 19 times profit, much higher than historical averages (16.3 over the last hundred years); despite our belief the longer term trend is for appetite to return and the USD to continue lower, for now we respect this correction in the market and will look to the broader indicators of market risk sentiment (Shanghai Composite, Baltic Dry Index) to direct our FX trades.

The G20 did not precipitate any firm policy initiatives; discussion of banker pay featured on the agenda, but this topic always feels like a populist distraction from the more important issues. The communiqué reiterated commitment to continue stimulus measures which should appease any fears of premature exit strategies; it also seems the G20 are leaving themselves flexible to allow for differential withdrawal of stimulus across countries in the coming months.

There’s very little on the data calendar today, but if the previous week has taught us anything it’s to watch out for policy-maker rhetoric. After Mervyn King’s devastating effect on GBP last week and ensuing criticism from traders, the Bank of England responded over the weekend that they were not trying to deliberately talk down the currency, though this provided little  boost to GBP after the fact. Japan’s new Finance Minister Fujii is also learning the pitfalls of easily-misconstrued comments after being quoted overnight that “it would be a mistake to use FX policy to defend industry” and “recent USD/JPY moves not abnormal”. USDJPY dropped on the news, taking out stops through 89.00 before Fujii returned to say that his comments were misinterpreted and were not intended to reflect government support for a strong JPY. USDJPY pared back gains to 89.60 levels, and one can’t help but think the new Fin. Min’s credibility may also have lost some ground in the process.