FOREX TRADERS

[ultimatepick]

01:56 Possible Reaction To G7 On Monday Morning Sydney, April 14: The market was right to bet late last week that the G7 would be a non-event for the currency markets. The question is will G7"s rather sanguine reaction to the current level of exchange rates result in any sharp moves on Monday morning?
It appears that European officials are quite satisfied that the EZ economy is in very good shape and this could explain why there was far more concern expressed by EZ officials back in February than there was at this weekend"s G7. It also appears that the weakening trend of the USD sits well with G7 officials who remain concerned about global imbalances. The fact that the USD/JPY is lower than it was in February was pointed out by Japanese Finance Minister Omi. There was very little mention or concern expressed towards the JPY-funded carry trade, which was being heralded by many analysts back in February as the biggest accident waiting to happen since the dot0cm collapse six years ago. Perhaps the G7 feels that the cleanout of JPY-funded carry trades in early March eliminated some of the less sophisticated investors and/or showed the market that carry trades are not "one-way bets". In any case there doesn"t seem to be anything coming out of the weekend"s G7 to suggest that the G7 is looking to right any wrongs in the FX marketplace.
The fact that the market wasn"t expecting anything form G7 should mute the response to the fact that virtually nothing came out of the meeting. This would suggest that the FX market will keep doing what it has been doing and will not be looking over it"s shoulder to avoid being blind-sided. Based on the most recent trends, the USD should continue to move broadly lower, the EUR should continue to outperform the JPY and high-yielding currencies such as the AUD and NZD should continue to outperform the rest of the field. -- [e-mail]