Currency Trading Update
Monday's leading contestant made more than $16,000 by Tuesday's close by trading EUR/JPY, but it was not enough to prevent Monday's contestant number 9 from claiming the top spot. Indeed, this contestant's currency trading portfolio balance jumped over $72,000 to $352,231.72 during a single trading day as he aggressively sold GBP/JPY. However, these profits were not made on closed positions and instead, were floating profits. At the time of writing, the position were still open and since Tuesday's close, GBP/JPY has bounced from support at 135.50, diminishing this contestant's gains. If GBP/JPY continues to climb higher, the top spot should remain open for the taking.
Looking ahead, event risk will pick up for the Australian dollar, Swiss franc, and US dollar over the next 24 hours:
Asian Trading Session
12/10, 19:30 ET
Australian Unemployment Rate, Employment Change (NOV) - The November reading of the unemployment rate in Australia is forecasted to pick up to 4.4% from 4.3%, and while this is still a historically low number, the change is likely to suggest that labor market conditions will continue to weaken. In fact, the Australian economy is forecasted to have lost 15,000 jobs during November, which would mark the third drop this year. Mounting job losses may only exacerbate the slowdown in the nation, as consumers will have less incentive to spend and drive domestic demand. Overall, the Australian dollar faces downside risks from this employment report, especially if the net employment change drops more than expected. However, if the figures actually reflect even a slight increase in hiring or a stable unemployment rate, the Australian dollar could gain.
European Trading Session
12/11, 3:30 ET
Swiss National Bank Rate Decision - Of the 18 economists polled by Bloomberg News, 15 believe that the Swiss National Bank (SNB) will cut rates by 50 basis points to 0.50%. On the other hand, 1 is betting on a 25 basis point reduction, while 4 forecast no change. Over the past two months, the SNB has been exceptionally aggressive when it comes to monetary policy, as they participated in the October 8 coordinated rate cuts (-50 basis points to 2.50%), and surprisingly slashed rates during unscheduled meetings on November 6 (-50 basis points to 2.00%) and November 20 (-100 basis points to 1.00%). According to a SNB press release from November 20, the central bank forecasted that inflation could fall below their 2% target before the end of the year and sees more pronounced risks for a "marked slowdown" in the Swiss economy next year in light of the worsening in international economic conditions. The Swiss franc has been one of the few currencies to respond to central bank rate decisions, compared to the euro and British pound, which are both trading higher even though the European Central Bank and Bank of England cut rates aggressively last Thursday. As a result, if the SNB does indeed cut rates in line with expectations, the Swiss franc could pull back. On the other hand, if the SNB leaves rates unchanged at 1.00%, the Swiss franc could actually rally.
US Trading Session
12/11, 8:30 ET
US Import Price Index (NOV) - The US import price index is anticipated to have contracted a record 4.9% during the month of November, bringing the annual rate down to a more than six year low of -2.0%. The change will be the result of plunging commodity prices and the stronger US dollar, and will add to evidence that inflation pressures are falling rapidly. Furthermore, the news could add to speculation that the Federal Reserve will cut rates when they meet on December 16, as fed fund futures are already pricing in a 75 basis point cut to 0.25%. As a result, there is potential for the US dollar to weaken on Thursday, and perhaps even break out of its recent trading ranges.