Currency stuff

The USD looks to be gaining ground on the back of comments from various US officials, now worrying about inflation.

Sub prime is so yesterday's news. Now the Fed is worried about the USD weakening further, and the impact on inflation as a result.

Ultimately they can intervene and raise interest rates in the US if they have to, and traders know this.

This is moving the USD to strength against the Euro (at last, given I have bought USD3m!) and also against the Yen.

So have bought USD 1m and sold Yen today at 106.30. Also cut the AUD1m long position today at 0.9500 and banked the gains (went long at 0.8720).

So only have USD long positions now against Euro and Yen.

Will blog on updated positions and total gains to date on the weekend.

Michelle Pfeiffer - Makin' Whoopee

This is Michelle showing the world why she deserves all the glory!!

She is older now, but still gets me going!!

The Budget......

....was boring.

But at least the markets have begun to reprice the lower interst rates that were being foolishly predicted.

When will people realise that lower growth does not equal lower interest rates?

Lower inflation equals lower interest rates, and we have all kinds of inflationary pressures looming due to higher oil prices.

Wait until Bollard confirms this in June. Then watch interest rates move back up and the NZD/USD retest 0.8000.

No Minister is such an excellent blog

Here's why and here and here

Great reading!!

Position update

Here are the trades I am active in:

NZD/JPY
Square

NZD/USD
Square

EUR/USD
Long USD short 3m Euro at average of 1.5160

Current rate 1.5480: loss

Comment:
Watching and waiting for a turn in the EUR/USD back below 1.4500.

AUD/USD
Long AUD1m short USD at 0.8720

Current rate 0.9430: Gain

Comment:
Will probably take profit on next test of 0.9500, and will cut and bank the money if below 0.9200 is seen.

Total Gains to date:
NZD266,412.00

Next trade:
Looking to sell NZD1m buy USD on a move into the 0.7900 - 0.8000 area.

Euro update

Added another 1m Euro and bought USD at 1.5600 yesterday. So total position is now short Euro 3m long USD at an average of 1.5160.

Still well in loss, but I believe the USD is oversold and the Euro still has a number of issues ahead of it as the sub prime losses spread to European banks.

Will add to AUD long position if 0.8900 is seen in next few days.
Still waiting for good levels to short NZD against the AUD.

EUR/USD, now 1.5330 spot.

Just sold a further 1m Euro and bought USD at 1.5330, making the position now short EUR2m long USD at an average of 1.4940.

Will review again if 1.5500 is seen, but still expect bad news to hit Europe as the sub prime mess rolls on. The US banking scene has been up front (more or less) on their losses. Europe has a long way to go, and the markets are not yet factoring in bad news from Europe.

When Europe goes, it will be a hard fall.

Watch this space.