Currency Trading Update

The currency trading portion of the Million Dollar Portfolio Challenge is heating up, as the leading contestant holds a portfolio balance of over $1,000,000 and has a grip on 5 of the top 7 positions (as of Thursday's close). At the time of writing, contestant number 1 appeared to be trying to catch this morning's decline in EUR/USD following the release of US non-farm payrolls, which fell by a whopping 524,000 in December and brought the cumulative amount of job losses in 2008 to 2.589 million, the most since 1945. Meanwhile, the unemployment rose more than expected to a 15-year high of 7.2 percent from 6.8 percent, confirming the already bleak outlooks for growth going forward, as the minutes from the Federal Open Market Committee's last meeting showed that some members saw the potential for a "prolonged contraction." However, since the Federal Reserve has already cut the fed funds target to a record low range of 0.0 percent - 0.25 percent, there is no potential for further interest rate cuts, which has allowed the US dollar to rally and brush off this abysmal data.

There are two other traders struggling to knock the leading contestant out, though. Contestant number 4 managed to hold on to his place in the rankings trading GBP/JPY, despite the fact his portfolio actually lost approximately $35,000 between Wednesday and Thursday, bringing his balance down to $629,871.02. Meanwhile, contestant number 7 from Wednesday clawed his way up two spots to round out the top 5 with a portfolio balance of $625,905.41. This contestant is poised to move even higher as he sold EUR/USD yesterday near 1.3700, meaning that the portfolio has made a pretty penny this morning on the back of the US dollar's rally.

There are no key economic indicators due to be released on Sunday or Monday of next week, but watch for our outlooks for major releases on Wednesday and Thursday.

Terri Belkas
Currency Strategist
Forex Capital Markets LLC

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