Currency Trading

The US economy delivered good enough statistics during the first four days of the week to reassure FX spread trading investors that the recovery was moving ahead just fine.

Purchasing managers’ index readings for the manufacturing and services sectors once again led the world and factory orders scored a monthly increase.

Jobs growth slowed in March, with just 120k employees added to non-farm payrolls but the news came out on Friday, when most of the world was on holiday.

The biggest boost to the dollar came from the minutes of the Federal Reserve’s March policy meeting.

Investors were surprised and delighted to see that the Fed is moving further away from the idea of an extension to its quantitative easing programme.

Friday’s weaker payrolls number slightly spoiled the effect but investors are less worried than previously about the Fed flooding the world with newly-printed dollars.

By MoneyCorp.

CFDs, Forex and Financial Spread Trading carry a high level of risk to your capital and can result in losses larger than your initial stake/deposit. These forms of trading may not be suitable for everyone so please ensure you fully understand the risks involved. Where necessary, seek independent financial advice.

The Loonie followed a path midway between the antipodean dollars and the American one, gaining the best part of two cents against sterling on the week.

It found useful support on Wednesday, after the figures for economic growth in the third quarter came out. Gross domestic product expanded by an annualised 3.5% in Q3, equivalent to quarter-on-quarter growth of nearly 0.9%.

It meant that Canada’s economy grew at more than four times the pace of Euroland (0.2%) and appreciably faster than Britain (0.5%) and the States (0.6%).

Friday’s employment numbers were less helpful. Although the number of people in full-time jobs went up by 34.6k, the number of part-time jobs was down by -53.3k in November. The net loss of nearly 19k jobs was wildly adrift from the expected 20k increase and pushed the unemployment rate up from 7.3% to 7.4%.

The news didn’t particularly hurt the Canadian dollar spreads, but brought to an end the uptrend it had enjoyed for the previous four days.

By MoneyCorp.

CFDs, Forex and Financial Spread Trading carry a high level of risk to your capital and can result in losses larger than your initial stake/deposit. These forms of trading may not be suitable for everyone so please ensure you fully understand the risks involved. Where necessary, seek independent financial advice.

The Loonie managed to avoid criticism by having nothing to say for itself that might annoy investors.

It couldn’t conceal its association with energy exports or its massive neighbour to the south, but the price of oil went nowhere over the week and the US dollar went up.

Investors continued to shift their money from Eurozone government bonds into US Treasuries: whilst it is feasible that Italy could default on its euro-denominated borrowings, such an event would be impossible in the States, where they can print as much of their own money as they want.

The sole statistic from the Canadian economy was September’s retail sales. At 1%, the monthly increase was not a big one – but it was twice as strong as the 0.5% that investors had been expecting and it helped to support the Canadian dollar spreads.

By MoneyCorp.

CFDs, Forex and Financial Spread Trading carry a high level of risk to your capital and can result in losses larger than your initial stake/deposit. These forms of trading may not be suitable for everyone so please ensure you fully understand the risks involved. Where necessary, seek independent financial advice.