June 7, 2008

How the Friday's surprise could affect my decisions this week

I expected to see dollar depreciation in short term, especially against higher yielding currencies but the problem is that almost all the things I wanted to see in a week has happened last Friday!

In fact I think that the reaction to the unemployment data was so strong that makes it difficult to anticipate the degree of future reactions to upcoming data.

For example, I do expect that the inflation warning in Britain's PPI on Monday should be in favor of GBP, but I would be technically more conservative on entry point.

At the same time there is still opportunity on currencies such as NZD which were the victims of recent rising in risk-aversion.

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