Good to see Cable back over 1.50....

purch

Models were seen keen buyers after, the move to the 1.5112

You can almost guarantee a move back down to 1.45 then !!!!! :eek:

laffer

I think it is USD weakness as the GBP is collapsing against currencies like the AUD.

inspector_monkfish

another new high just touched at 1.5150

inspector_monkfish

laffer wrote: »

I think it is USD weakness as the GBP is collapsing against currencies like the AUD.

AUD is having a good day against all ccys

it just touched a 7mth high against the USD

inspector_monkfish

13:19 05May09 IFR-COMMENT: Cable to Lead on More General Dollar Weakness

[12:18 COMMENT: Cable to Lead on More General Dollar Weakness ] London, May 5.

Pull up a chart of the $-index and S&P500 and one will see a close relationship between the two since Aug-2008. Correlations come and go and it is difficult to find a correlation that sticks over a longer period of time especially in FX markets. However, the $-index/S&P correlation is interesting as it tells the story of how FX markets have traded off the gyrations in equity markets and the common factor being the evolution of risk taking. This relationship can be broken down further for Cable where there is a strong relationship since Lehman's collapse last year between Cable and the share price of the UK bank Barclays.

With S&P having broken through the 875/80 resistance level the potential is for risk taking to take another step up and thus for the dollar to weaken more generally. The AUD has already broken through its highs after finding some resistance in April but Cable might have the most catching up to do given that market psychology has been more negative here than on other FX pairs. Indeed turning back to the simple correlation between the price of Barclays and Cable there is the potential for Cable to move all the way to 1.7000 should risk taking
continue. But this weakness will be a part of a more general bout of dollar weakness.

Generali

The Aussie is probably being driven by base rates which, at 3%, are high by developed world standards.

Also, the very low sovereign debt and nature of Australia's foreign trade means the chances of sovereign default are extremely low.

inspector_monkfish

Generali wrote: »

The Aussie is probably being driven by base rates which, at 3%, are high by developed world standards.

Also, the very low sovereign debt and nature of Australia's foreign trade means the chances of sovereign default are extremely low.

probably not just that.
why has it only taken until today for the markets to suddenly realise this?

Generali

inspector_monkfish wrote: »

probably not just that.
why has it only taken until today for the markets to suddenly realise this?

No idea. The AUD has been rising against the quid for the past year or so.

Today the RBA met and kept rates on hold which was probably the consensus call but only just - plenty of people would have been expecting a cut.

Let's not forget, AUD is a secondary currency at best. There are only 22,000,000 of us lucky sods living over here. I guess it's just not always on the radar.

My experience of working in FX was that you can get big intraday moves just caused by a corporate entity looking to hedge a big amount or needing to raise foreign currency to complete on a deal. Even a few tens of millions can be enough to allow you to see the market move, or at least could in 2000.

inspector_monkfish

Generali wrote: »

No idea. The AUD has been rising against the quid for the past year or so.

Today the RBA met and kept rates on hold which was probably the consensus call but only just - plenty of people would have been expecting a cut.

Let's not forget, AUD is a secondary currency at best. There are only 22,000,000 of us lucky sods living over here. I guess it's just not always on the radar.

My experience of working in FX was that you can get big intraday moves just caused by a corporate entity looking to hedge a big amount or needing to raise foreign currency to complete on a deal. Even a few tens of millions can be enough to allow you to see the market move, or at least could in 2000.

14:02 05May09 IFR-AUD/USD: A Gold Rush

[13:02 AUD/USD: A Gold Rush] New York, May 5. Aussie is displaying signs of a
media led euphoric surge. Gold is higher because of Fed"s tsry buying spree ydty, uncertainty about the bank stress tests, and hopes that reemerging countries in Asia will start accumulating "bling". Corporate M&A and bond deals are closing as the market heads into the belly of the month. Two-year Aussie bond yields added another 11bp after the RBA left policy rates unchanged at 3.00% and declared itself a voyeur. A 3.5% March rise in dwelling approvals and modest budget victory (forecast of AUD165mln surplus) by the State of Victoria has contributed to the belief that all is not down down-under. Despite the data and rise in yields, many forecasters expect further cuts later this year as employment
conditions deteriorate.

Referencing ytdy"s price action, sentiment toward the commodity group has improved. Energy and material companies led the way in the US and contributed to the 0.2% rise in shares in Australia. The hope that Chinese demand will rise has, once again, sparked buying interest. However, the Telegraph article on rising oil reserves and tepid demand may put a damper on the euphoilia.

Trade Minister Crean comments ytdy about a two way street for investment introduces realism into China recovery argument. China is interested in its growth first. The PMI recovery from ytdy should be viewed in this context.

As such, the commodity recovery will continue but soy may beat out oil. AUD/USD profits are being booked at the 0.7450. Options expire at the same level and at 0.7350. Most of the volume has gone through between 0.7390/0.7410. 0.7475, today"s high, is a 38.2% retracement from the high of 0.9856 to October lows.

AUD/JPY is said to have 74.00 barriers protected. Various shippers are trading off London highs. It seems like a good time to book spot profits and start looking at relatively cheap 0.80 strike options should the green shoots lead to amoon shot.

inspector_monkfish

Cable experienced a bit of profit taking.
Off the highs, and trading at 1.5080 currently.