Sterling Weakens on Further UK QE Rumours

Spread Trading 29 Sep 10

Today's update see » Financial Markets.

Spread Trading 29 Sep 2010

The Bank of England’s Adam Posen seems to have gotten in on the currency devaluation act with comments on the need for even more QE to prevent a lost decade of growth.

One does wonder where the lessons of Japan have gone. Japan has done nothing but stimulate through state spending for the last 20 years to no great effect.

All the billions of Pounds across the globe, probably trillions by now, seem to have done little other than push the problem further down the track and the effort to drive it further is getting heavier and heavier.

Poor growth and unemployment are terrible things but at some point it has to be recognised that selling our future to prop up the present is, possibly, not a solution.

Whether the BoE does do more QE is still a moot point but the mere threat of it had, presumably, the desired effect with Sterling slipping to €1.1625 versus the Euro, falling another cent on the day, having been at €1.2280 a month ago.

Effectively the Sterling move was the same as the Dollar’s reaction to the FOMC statement last week. At some point soon we can probably expect a statement from an ECB member stating that the Eurozone is pondering more rescue/stimulation packages in an attempt to reverse the recent Euro strength.

The BoJ has already nailed its colours to the mast with actual intervention a couple of weeks ago when the USD/JPY cross fell below ¥83.00 which drove us briefly up to ¥86.00. We are now back at ¥83.60 so the question will be “if the market slips to ¥82.85 again will the BoJ come in”?

Only an hour into the day and the FTSE has already spiked up to the high range of the last few weeks, had a quick look, shaken its head and gone back down again to the closing levels of yesterday.

The reaction this morning is almost a mirror activity to the open yesterday and we can see the 5490/5500 to 5630/40 range getting more and more entrenched as the month goes by. Every day looks like breaking in one direction or the other only for the attraction of 5550 to pull us back.

Support and resistance levels remain the same as yesterday as mentioned above.

The Dow is also struggling to maintain prices above 10850/75 and with October just around the corner we may find that discretion is the better part of valour for many of our financial spread betting account holders. Memories are long and many of the big bear moves have started in October which tends to make traders wary.

Currency markets remain Dollar unfriendly, and Sterling unfriendly after Posen’s comments, and so our spread trading clients are heavily short of the Euro. At the moment they seem to be suffering as they are trying to pick a top and are being squeezed.

As we commented yesterday the brief Dollar rally had a ‘dead cat bounce’ look about it and the afternoon action just drove the Euro and Yen higher and higher.

Resistance for the Euro is just above $1.36 and up at $1.3680/90 support is at $1.3550/60 and $1.3500/10

Cable is worrying a bit as we are being pushed around by comments but the supports at $1.5770 and $1.5725 look solid for the moment.

As previously warned, the spike lower in the gold spread betting market was very short lived and the price recorded a 30 Dollar high low range as the early sell off was reversed yet again by buying out of the US. The 13:00-14:00 time period in the UK really does seem to be critical every day.

We are now above $1300 and any sellers must be well and truly squashed flat. The break above the previous high of $1265 has proved decisive for the time being and we have had no attempts to retrace back down.

New highs for gold tend to be followed about a fortnight later with a small sell off so historically we might be looking for caution. However, as we have stated many times in these comments, shorting the yellow metal is a very dangerous occupation just at the moment.

Under no circumstances are the comments and the information provided herein to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice.

Neither CleanFinancial.com nor Financial Spreads or any contributing author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

Financial Spreads » "With FinancialSpreads.com you get all the advantages of
Spread Betting as well as commission free CFD Trading on 2,500+ markets, 24 hour trading, professional level charts and..." read Financial Spreads review.

Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary

Article provided / approved by Financial Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110

'Spread Trading 29 Sep 10' edited by SD, updated 29-Sep-10

Related Articles:

Financial Markets, updated 22-May-13
Financial Markets - your daily update on the markets with views and opinions from the insiders, plus a look at...read article: Financial Markets.

Online Spread Trading, updated 21-May-13
A look at the latest spread betting markets plus company reviews, compare prices and details on where to free charts and free live prices....read article: Online Spread Trading.

FTSE to Underperform as Constituents Go Ex-Dividend, updated 24-Apr-13
Although today's start is expected to be firm, the FTSE is set to under perform its peers as some constituents go ex-dividend, knocking 9 points off the index. The corporate earnings in the US continued to...read article: FTSE to Underperform as Constituents Go Ex-Dividend.

Renewed Demand Sees the Gold Rebound Continue, updated 23-Apr-13
Gold continued its rebound yesterday, with the online spread betting market gaining $17.7 to $1,426.2, on reports of renewed demand for coins, bars and jewellery. After suffering from such a violent...read article: Renewed Demand Sees the Gold Rebound Continue.

Index Trading: Nikkei Hits 5yr Highs as Monetary Policy Remains Unchallenged, updated 22-Apr-13
Asian markets are also trading sharply higher, led by the Japanese Nikkei which is nearing a 5 year high. Japan's optimism seems to be founded on the fact that they didn't receive any explicit singling out at the...read article: Index Trading: Nikkei Hits 5yr Highs as Monetary Policy Remains Unchallenged.

Dow Jones Falls as US Corporate Earnings Disappoint, updated 19-Apr-13
The US corporate earnings season continued to disappoint investors yesterday with the Dow Jones falling 110 points to 14,496 as a result. The pessimism was also supported by weaker than anticipated economic...read article: Dow Jones Falls as US Corporate Earnings Disappoint.

Poor Eurozone Ecostats Weaken the EUR/USD Spread Betting Pair, updated 18-Apr-13
The economic data coming out of Europe yesterday was pretty dismal, with auto sales reaching a 20 year low. Consequently, the euro dropped versus the dollar, effectively giving back the previous day's gains by...read article: Poor Eurozone Ecostats Weaken the EUR/USD Spread Betting Pair.

Improved US Housing Data Boost the US Crude Oil Spread Betting Market, updated 17-Apr-13
Better figures for the US housing sector bolstered crude oil demand yesterday, pushing the price of a barrel of US crude oil up by $1.48 to $88.83. That saved the day as crude prices had fallen to an intraday low of...read article: Improved US Housing Data Boost the US Crude Oil Spread Betting Market.

Slowing Chinese Economy Spurs Gold's Largest Drop in 33-Yrs, updated 16-Apr-13
Those trying to catch a falling knife after Friday's plunge were in for a nightmare session yesterday as the gold spread betting market posted an even bigger drop. The precious metal lost an incredible $129.2 to...read article: Slowing Chinese Economy Spurs Gold's Largest Drop in 33-Yrs.

Bearish Momentum Sees the Gold Spread Betting Market Break Below $1500, updated 15-Apr-13
The bearish momentum in gold undoubtedly gathered pace on Friday as the market price crossed below the psychologically important $1,500 mark. In a violent nosedive, the precious metal plunged $72.7 to...read article: Bearish Momentum Sees the Gold Spread Betting Market Break Below $1500.

First Page << 1 2 3 4 5 6 7 8 9 10 11 12 >> Last Page

Daily Spread Trading Index

Index of spread trading articles - the daily Spread Trading update from Financial Spreads, for more articles see the Spread Trading News Index.

Q) Average Trading Results?

A) Get free trading tips, offers, price updates, important news and more! All Free - Click here!

Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The contents on CleanFinancial.com are for information purposes only and are not intended as a recommendation to trade. Nothing on this website should be construed as investment advice.

Neither CleanFinancial.com nor any contributing company/author accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.

* Tax law is subject to change or may differ if you pay tax in a jurisdiction other than the UK.

1) Daily Trading Tips

2) Financial Tips

3) Financial Tipping