Euro / $ / GBP Rates
Discussion
So might minds of PH.....there's some interesting action going on in the FX market right now.
£ has had the biggest weekly drop for 3 years versus the $ ....all the way down from $2.00 to $1.92....as for the Euro versus the $ even worse! And the Aussue $ is getting bummed versus the US $ down below 90c from near parity.
Any views out there?
Is it all over for the Gordon Brown Pound and Euro-Hash-Mash?
£ has had the biggest weekly drop for 3 years versus the $ ....all the way down from $2.00 to $1.92....as for the Euro versus the $ even worse! And the Aussue $ is getting bummed versus the US $ down below 90c from near parity.
Any views out there?
Is it all over for the Gordon Brown Pound and Euro-Hash-Mash?
GBPUSD
Last week saw a 30bp change of 2yr rate spreads between UK and US, meaning the markets are pricing in the potential for rate cuts in the UK. The market appears to be expecting 50bp rate cut by end 2008.
EURUSD
With the ECB keeping at 4.25% and indications of a further declining economic outlook coming from Germany, there appears to be expectation of further rate cuts by Q1 09
Combine this with the US at 2% and little room to manouvere down any further and a belief that the market has already priced in the existing poor sentiment means that the $ is now looking better against the EUR and GBP.
My 2p worth.
Last week saw a 30bp change of 2yr rate spreads between UK and US, meaning the markets are pricing in the potential for rate cuts in the UK. The market appears to be expecting 50bp rate cut by end 2008.
EURUSD
With the ECB keeping at 4.25% and indications of a further declining economic outlook coming from Germany, there appears to be expectation of further rate cuts by Q1 09
Combine this with the US at 2% and little room to manouvere down any further and a belief that the market has already priced in the existing poor sentiment means that the $ is now looking better against the EUR and GBP.
My 2p worth.
WWESTY said:
shadowninja said:
If by today, you mean Friday... 
Edited by shadowninja on Monday 11th August 14:54
...and dollar has continued down....
Both GBP and EUR have slumped against the dollar today. I went short on GBP/USD last night and made a few bob.
Edited by apguy on Tuesday 12th August 13:01
apguy said:
WWESTY said:
shadowninja said:
If by today, you mean Friday...
Edited by shadowninja on Monday 11th August 14:54
...and dollar has continued down....
Both GBP and EUR have slumped against the dollar today. I went short on GBP/USD last night and made a few bob.
Edited by apguy on Tuesday 12th August 13:01
WWESTY said:
apguy said:
WWESTY said:
shadowninja said:
If by today, you mean Friday...
Edited by shadowninja on Monday 11th August 14:54
...and dollar has continued down....
Both GBP and EUR have slumped against the dollar today. I went short on GBP/USD last night and made a few bob.
Edited by apguy on Tuesday 12th August 13:01
I still reckon the Euro vs $ is the big story looking at the eurozone I really find the euro premium hard to justify.
Timmy35 said:
The AUD has been getting a real ( and overdue ) hammering too vs USD.
I still reckon the Euro vs $ is the big story looking at the eurozone I really find the euro premium hard to justify.
EURUSD is bouncing around all over the shop today. Went 30bps down on the $ and is now 49.8bp up! (14:22) I'm in full agreement that the EUR looks overvalued. I still reckon the Euro vs $ is the big story looking at the eurozone I really find the euro premium hard to justify.
Not sure I can stomach taking a short futures position on EURUSD as my stop would need to be a long way from spot to avoid the spikes we're getting at the moment.
apguy said:
Timmy35 said:
The AUD has been getting a real ( and overdue ) hammering too vs USD.
I still reckon the Euro vs $ is the big story looking at the eurozone I really find the euro premium hard to justify.
EURUSD is bouncing around all over the shop today. Went 30bps down on the $ and is now 49.8bp up! (14:22) I'm in full agreement that the EUR looks overvalued. I still reckon the Euro vs $ is the big story looking at the eurozone I really find the euro premium hard to justify.
Not sure I can stomach taking a short futures position on EURUSD as my stop would need to be a long way from spot to avoid the spikes we're getting at the moment.
I used to work on an FX desk at a large Japanese bank, it was a prop desk so punting the banks own money....what always impressed me was how little the head trader wanted to tinker with the overall strategy.....roll it over yes, but not keep trying to take profits of close out losses.
That was very different from my previous place which was a Fixed Income derivatives desk with 2 very frenetic American traders who kept trying to bag small profits all the time.
Of course you can guess yoy who made the biggest profits ( having had the balls to sit out some ruddy great unrealised losses ). The yanks got fired in the end......went off to start a hedge fund I heard.
Timmy35 said:
Ah IF I were to punt on FX.... I'd be taking a longer term view. And opening a position with a very deep stop loss and a target for the Euro nearing parity within 18mths. ( I'm not saying it definitely will just that would be my target ). I'm not a fan of day trading.....but each to their own!
As I'm using IGMarkets, I have a limited range of future contracts to choose from 
I never punt significant amounts of money as I'm strictly an amateur.
Timmy35 said:
I used to work on an FX desk at a large Japanese bank, it was a prop desk so punting the banks own money....what always impressed me was how little the head trader wanted to tinker with the overall strategy.....roll it over yes, but not keep trying to take profits of close out losses.
I currently work Equity Derivatives front office for a large Japanese bank. Thats mainly prop as well Although I'm a tech person and not a trader (trading systems and risk), so my FX interest is purely self-serving. Personally I'd love to sit next to an FX trader for a week, but its not the kind of internal course they run here!Timmy35 said:
That was very different from my previous place which was a Fixed Income derivatives desk with 2 very frenetic American traders who kept trying to bag small profits all the time.
Of course you can guess yoy who made the biggest profits ( having had the balls to sit out some ruddy great unrealised losses ). The yanks got fired in the end......went off to start a hedge fund I heard.
I used to work for a hedge fund (ex-CSFB trader) and they're in and out of positions like it's a game. Mind you, when they went in, they really went in balls and all.Of course you can guess yoy who made the biggest profits ( having had the balls to sit out some ruddy great unrealised losses ). The yanks got fired in the end......went off to start a hedge fund I heard.
Edited by apguy on Tuesday 12th August 14:49
apguy said:
I used to work for a hedge fund (ex-CSFB trader) and they're in and out of positions like it's a game. Mind you, when they went in, they really went in balls and all.
Were they algo trading? Had a mate who set up a fund doing that. Masses of trading volumes, but well at the end of the day it all seemed to be mouth and no trousers with it. Impressive code behind the model mind you, and a very powerful computer. I suppose I'm just old fashioned!Oh the Jap bank I was at TMI. Now part of Sumitomo Corp though I believe.
I went off into oil/gasoline a few years ago, so I'm more on the commodities side than FX these days.
Edited by Timmy35 on Tuesday 12th August 14:53
Timmy35 said:
Were they algo trading? Had a mate who set up a fund doing that. Masses of trading volumes, but well at the end of the day it all seemed to be mouth and no trousers with it. Impressive code behind the model mind you, and a very powerful computer. I suppose I'm just old fashioned!
No algo's, plain old arbitrage was their thing. M Hintze is the main man. I started when they had 20 staff, now have > 300. They've done pretty well. Certainly it was the best paid job I've ever had.Timmy35 said:
I went off into oil/gasoline a few years ago, so I'm more on the commodities side than FX these days.
We're obviously working our sectors in reverse. I worked commodities for Morgan Stanley a number of years ago. Energy and metals desk, the energy side was pretty interesting. I remember they were long electric futures, and then Diana died, they were left with huge contacts that were made worthless when the funeral date was announced. (Everyone staying inside, shops and factories shut etc meant energy demand was the lowest for decades)I also remember when an oil futures contract matured and the desk got a phonecall from Rotterdam asking what they wanted to do with the oil tanker that had just berthed!
apguy said:
I also remember when an oil futures contract matured and the desk got a phonecall from Rotterdam asking what they wanted to do with the oil tanker that had just berthed!
love it. There's a similar story of a Gold contract held by Golman Sachs in London reaching physical delivery and a security van turning up with the bullion.
I'm working a bit on a power trading exchange at the moment.....it's doing my head in. Strange market.
Timmy35 said:
apguy said:
I also remember when an oil futures contract matured and the desk got a phonecall from Rotterdam asking what they wanted to do with the oil tanker that had just berthed!
love it. There's a similar story of a Gold contract held by Golman Sachs in London reaching physical delivery and a security van turning up with the bullion.
So what did they do in each case?
Actually, let me guess. They got Gordon Brown to buy it at twice the actual value?
Edited by shadowninja on Tuesday 12th August 16:25
shadowninja said:
So what did they do in each case?
Actually, let me guess. They got Gordon Brown to buy it at twice the actual value?
Well in the case of the tanker it was a right fk-up. As physical delivery wasn't expected there were no arrangements in place to offload. Berthing fees at Rotterdam were running into thousands £ per day. Plus you then have to pay disruption fees for the tanker crew who can't set sail, and the killer fee is the compensation to the shipping company as they have a tanker stuck in port unable to earn.Actually, let me guess. They got Gordon Brown to buy it at twice the actual value?
The oil I believe was sold at well below cost to the first party who could off-load. Any potential profit was completely annihilated by the shipping/port fees.
Put it this way, it's the kind of mistake a desk only makes once
Edited by apguy on Tuesday 12th August 16:36
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