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3 Currencies to Short
Over the past few weeks, it has becoming increasing clear which countries and their currencies are headed down the gutter: The 3 currencies that I am most bearish for the near term are (in order of bearishness). 1. New Zealand Dollar - Targeting 70 Cents The Reserve Bank of New Zealand cut interest rates last night for the first time in 5 years.
With retail sales falling by the most in 4 years and consumer
confidence hitting record lows, the New Zealand dollar has weakened to
the lowest level in 6 months. With RBNZ Governor Bollard promising more
rate cuts and the futures curve pricing such action, the New Zealand
central bank has become the most aggressively dovish policy maker of
the G10. As a result, I expect significant weakness in the NZD and for
it to fall below 70 cents against the US dollar in the near future.
Also look for AUD/NZD to hit new highs. 3. Euro - Stubborn Comments to Haunt the Euro German
business confidence, investor confidence and consumer confidence have
fallen significantly. The manufacturing sector is beginning to crumble
under the weight of the slower global growth, high interest rates and
the strong Euro. The ECB is stubbornly hawkish, but expect this stance
to come back and haunt them.
by Kathy Lien (Kathy Lien) Disclaimer: Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests. Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk. There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital. |
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