×

Currency Trading Update

The current leader in the currency trading portion of the Million Dollar Portfolio Challenge has dominated with EUR/USD. Indeed, this contestant's best trades have been those executed with a longer time frame in mind, and he is now floating over $150,000 in profits thanks to multiple short EUR/USD positions executed just after the pair topped on December 18. The majority of the other contestants in the top 5, as of Friday's close, have opted to trade on a short-term basis, but as we can see, longer-term strategies tend to yield more significant gains when there are major directional moves in the forex markets.

Low volumes may translate into low volatility ahead of the holidays, but here are the economic indicators that will be worth watching over the next 24 hours:

Asian Trading Session
*No key indicators due to be released.

European Trading Session
12/23, 04:30 ET
UK GDP (3Q F) - The UK's Office for National Statistics is anticipated to confirm that GDP contracted by 0.5 percent during Q3, following a total stagnation during Q2, signaling that the economy has tipped into recession for the first time since 1990-1991. The collapse will be the result of the sharpest drop in consumer spending since 1995 and a decline in investment as the financial crisis took its toll. The Bank of England has already cut rates to 2.00%, the lowest since 1951, and is anticipated to reduce the Bank Rate by another 50bps in January. The British pound is only likely to respond to the figures if GDP falls more than expected, though downside risks linger for the currency in light of interest rate expectations for the country.

US Trading Session
12/23, 08:30 ET
US GDP (3Q F) - The final round of US GDP readings for the third quarter is not expected to show any revisions upon release at 8:30 ET. Indeed, annualized GDP is forecasted to go unchanged at -0.5 percent, while personal consumption is expected to hold at -3.7 percent. It will likely take a surprisingly low result to illicit any sort of reaction from the markets, as traders are already well aware that economic conditions in the US remain dismal.

12/23, 10:00 ET
US New, Existing Home Sales (NOV) - The Commerce Department's measure of new home sales is expected to fall 4.2% to 415K, the lowest since early 1991, while the National Association of Realtors index of existing home sales is forecasted to fall by 1.0% to 4.93M, holding near the lowest level since record keeping began in 1999. Overall, conditions in the housing sector remain weak, and given recessionary factors such as rising unemployment and contracting consumption, home sales are likely to continue falling in coming months.

Terri Belkas
Currency Strategist
Forex Capital Markets LLC

Forex Capital Markets, LLC and its affiliates assume no responsibility for errors, inaccuracies or omissions in these materials. They do not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Forex Capital Markets, LLC and its affiliates shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials.