[B]My picks:[/B] Long USD; Short EUR, AUD, NZD and CAD
[B]Expertise:[/B] Global Macro
[B]Average Time Frame of Trades:[/B] 1 week
Today, the USD/CAD rallied sharply after the Bank of Canada unexpectedly cut rates by 25bps to 0.25 percent, an all-time low. Like I said yesterday, “investor’s aversion towards risk-taking combined with uncertainty concerning the outlook of the global economy remain key drivers of long term trends in the currency market” and today’s massive sell-off in the CAD exchange rate confirms that tendency. Having said that, I will continue to look for opportunities to sell rallies on high yielding export dependent currencies. Moreover, I have been taking short positions in the euro since the EUR/USD exchange rate was being offered at 1.60 and today I will be looking for opportunities to sell it around 1.30 dollars. Apparently, the United States economy seems to be in a much worst condition than the euro zone economy, judging by the massive job losses we have seen in the last few months. However, this is only true because labor rules within the euro zone are much less flexible than those in the United States. In fact, recent data continues to point towards a sharp contraction in economic activity in the euro zone and lower interest rates could be needed to prevent the region from falling into a severe recession.