If someone charged with deciding monetary policy (therefore has significant tout for an economies markets) says they are in a recession, then it is probably true - and therefore a market event. King was likely trying to relieve some of the speculative pressure on tomorrow's GDP release. Economists are forecasting a relatively modest 0.2 percent contraction. I feel that number is somewhat generous. If that ends up being the case, then King's warning will have taken some of the steam out of the potential reaction to the release.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

Well, that was a rather strange few days of the GBP taking an absolute hammering and the USD, "rebounding".

So a short GBP trade did indeed work for me .

My next question is a simple one, but it does not have a simple answer, i think that this is a pattern that is emerging amongst all financially related questions!!

Where do you see the GBP in one years time, mainly against the dollar, or is there just to much that we do not yet know to take such a longer term view?

Thanks again

Bertie

Currency Analyst John Kicklighter gives you a video preview of tomorrow's Non-Farm Payrolls (NFP) release!

Hello Waldo,

That is specifically the problem. When you trade on a big piece of event risk, you take on the potential for high volatility and a fast-moving market. Both of these conditions widen spreads (a threat to limits) and make it very difficult to get out in time to salvage a losing trade (when trading without limits).

Many traders try to trade the expected explosion in volatility like a straddle in an options trade. However, if you place orders on both sides of the market - and you are feel you are being cautious with stops already laid out - you could end up with both positions triggered and stopped out in a matter of minutes. It's one thing to correctly forecast a jump in volatility, but then you need to go a step further and be proven correct on direction. Many times in the past, I have seen the market respond with a dramatic move in one direction after a release only to reverse and surge the opposite direction in a matter of moments (just look at the response to today's BoE rate decision).

I have found with time that it is best to wait for a few minutes for volatility to diminish, so that the threat of a sharp reversal can diminish and you can take advantage of the prevailing direction.

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

Hi everyone,

Obviously the huge news today has been the cut of 1.5% by the BOE on interest rates. Thats right, 150 basis points. Unbelievable, but i believe a bold move. Although it does give us further insight into the depth of the economic crisis that such a drastic cut was called for.

Dare i ask did anyone anticipate such a cut, and what are peoples thoughts on it.

Bertie

I've been sitting in some pretty slow moving positions recently with range conditions dominating price action and started to consider what could get this market moving again.

It is only a matter of time in opinion before many of the most liquid pairs will see significant breakouts and the resumption (or reversal) of major trends.

From the economic calendar, there seem to be few indicators that could force more than a localized breakout - versus the wide increase in volatility that I'm waiting for. A few indicators I'm watching specifically are the BoE's quarterly inflation report, first reading on the Euro Zone's 3Q GDP and US consumer confidence for November.

Perhaps the big break will come this weekend with a surprise, coordinated policy move from the G20 meeting in Washington. Of course, history has seen its fair share of market breaks where there was absolutely no data in play. Anyone think there is an economic release that can move the whole market?

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John Kicklighter is the author of Dynamic Carry Trade Basket, Watch What The Fed Watches, and Forex Trading Weekly Forecast on DailyFX.com

Today's dismal initial jobless claims give us a look at how price reaction to U.S. fundamental news releases have changed. Traditionally, a dour report would be bearish the dollar, but with the high correlation to risk sentiment right now any bad news seems to give the greenback a boost.

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John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

Despite a deeper than expected 75bps rate cut by the ECB, the Euro unexpectedly rallied. Not sure if traders were looking for more easing as we saw by the BoE or viewed the fact the the central bank was acting more aggressively as a positive for the region's economy. Not even President Trichet's comments that inflation would all below their 2% target and that downside risk are accelerating would turn bullish sentiment.

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John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.

Written by Terri Belkas, Currency Strategist
Full Article

The US dollar continues to consolidate within wide ranges, but remains relatively strong across the majors. However, on Friday morning, US non-farm payrolls are anticipated to fall by a whopping 330,000, which would be the worst decline since 1982, while the unemployment rate is forecasted to reach a fresh 15-year high. Will this news trigger a sharp decline in the greenback, or will the forex market consolidation continue?

What is the Market Expecting for October Non-Farm Payrolls?



Looking at the stats of what the 70 economists polled by Bloomberg News had to say, the range is very wide with the most pessimistic forecast at -470k and the most optimistic forecast at -220k. However, this is the first time ever that non-farm payrolls (NFPs) are anticipated to fall by more than 300k. If NFPs fall in line with expectations, they will surpass the 2001 low of -325k and could even beat out the 1982 low of -343k. Furthermore, the unemployment rate is anticipated to rise to 6.8 percent from 6.5 percent, the highest since 1993. What are the realistic odds that this could happen?

Arguments for Weaker Non-Farm Payrolls

1. Jobless Claims 4-Week Moving Average Continues to Climb Above Highest Levels Since At Least 2002
2. Continuing Claims Rise to the Most Since 1982
3. ISM Non-Manufacturing Employment Component Falls to Lowest on Record Going Back to 1997
4. ISM Manufacturing Employment Index Dives to Lowest Since 1991
5. Challenger Job Cuts Rise 148% to a 6-Year High
6. ADP Employment Change Falls By the Most Since November 2001
7. Despite Small Gain in November, Consumer Confidence Remains Near Record Low

Just by glancing at the list above, it is rather obvious that the odds are stacked in favor of a disappointing NFP release on Friday. Indeed, nearly every single leading indicator for US employment that we follow suggests that November was a month of heavy job losses, as the number of continuing jobless claims remains near the highest levels since late 1982-early 1983 at 3962K in the week ending November 22. Likewise, the employment components of both ISM Manufacturing and ISM Non-Manufacturing (services sector) plummeted to the worst levels since the 1990’s. Meanwhile, you may be wondering why we put consumer confidence into the list of arguments for weaker NFPs. Though the Conference Board’s consumer confidence survey rose during the month of November to 44.9 from 38.8, the index still reflects some of the worst levels on record going back to 1967.

Trading the Non-Farm Payrolls Release This Friday

The release of US NFPs can be very exciting and market-moving for the US dollar. However, we’ve been seeing lately that the reaction of the greenback does not always seem logical, as a weak NFP reading will sometimes be followed by US dollar strength (and vice versa). In fact, US economic data has generally been absolutely abysmal lately, fed fund futures are fully pricing in a 50bp rate cut on December 16, and yet the greenback has remained strong versus most of the majors. Why? In recent months, risk trends have driven price action in the currency markets, with risk aversion benefiting low-yielding currencies like the US dollar and Japanese yen while hurting higher-yielding currencies like the Australian dollar and New Zealand dollar. Furthermore, since the start of November, most of the major currency pairs have held within wide ranges, consolidating the sharp moves seen from July through October.



As a result, the release of NFPs on Friday shouldn’t necessarily be used as a trigger for making a trade. Instead, traders should either avoid trading at the time of the announcement (8:30 ET on Friday) due to the potential surge in USD volatility, or if trading on a longer-term time frame, simply keep that factor in mind and use wider stops. My bias? A weak NFP reading at -300K or lower has the potential to weigh on the US dollar, but with the long-term trend working in favor of dollar strength, I would look at declines in the currency as a buying opportunity

Written by Terri Belkas, Currency Strategist of DailyFX.com

DailyFX.com provides free FX news, trading resources, and market analysis to the forex trading community.

Pound, Euro, And Oil and Stock Exchange
Pound
Today BOE have been cut its rate 100 Basis point and ECB cut more then forcast and cut 75 Basis point now if we see both Economies comparetivly with USA Economy that both are not diffrent to USA ,Both are in Reccission and Both are facing Unemployment ,Fincail Crisis, Manufacturing PMI of Manufacturing in Euro and Uk both are Shrinking which are now at 35.6% and 34.4% Respactivly so there were in both area is not diffrent from USA but one thing which point out some thing and that thing is this ,Bank of England now its Interset rate at 2% and that Level of Rate 2% bank adopet it when Bank Of England Founded in 1694 and still today Bank of England maintain its Rate at 2% and this is lowest level of its history but now if we will fouces on other side that like Manufacturing PMI which is now at 34.4% and that is below then Expanision level of 50 and PMI of Manufacturing below this level since 6 month and Manufacturing contribute more then 16% of GDP of Uk, Unemployment at 5.8% according to ILO that level according to my thought will hit at 10% level and Spending of Cansumer declien and spending more then two thired of GDP ,Constraction PMI at 31.8% Constraction contribute more then 10% in GDP of UK , Home Price Index which have stood at -2.6% and Bank approved 32 Mortgage only and that will push down more Home valuse in coming days , Housing Sector also Announcement indicating they will not get its goal in coming days .All Thies Thing point out now Bank again cuts rate in coming day and it will happen first time in Bank of England History and might be End at Zero and according to Bank Of England Chairman Mr.King said Nov. 25 that “close coordination” with the government is needed if the interest rate reaches zero and said the “most pressing” challenge facing policy makers is getting financial institutions to resume lending". And that will more bad news for Pound and Pound (GBP) will touch its lowest level which will accurding to my thought Pound (GBP) 0.9600 per Dollar . So that Reason will push Pound(GBP) in selling against Dollar .
Services from banks to recruiters contracted at the fastest pace in at least 12 years in November, and manufacturing and construction shrank, surveys by the Chartered Institute of Purchasing and Supply showed this week. House prices fell 2.6 percent on the month, HBOS Plc said today.


EURO REGION (E-15)
EURO
Today ECB Cut its rate more then forcast and forcast was 50 Basis point its not Serprizing due to its Financial News indicating us ECB need to cut rate as less as 100 points so look it next bad thing which are here ,UK have sold more then 50% of its Goods in Euro Region (E-15) so Euro Area its bigest Market of UK and now if we fouces on UK current condition and its Every Financial news which discribe it befor in Pound artical like PMI and Home Price and etc. so its indicating us what is current condation of Euro Region its so bad ,Chain ,Russia, India, Brizel, South Africa and UAE all bigest market for Euro Region specilly for Germany who is Largest Exporter of World .all thies economies also facing crisis, due to Financial Crisis all over the world and Thies Economies Export its Mostly goods to Leading Economies of the World Like USA, UK,EUROPE all facing crisis and Unemployment raise day by day that are main Market for Textile, Lather Goods, Toys, Oil and etc. so all facing Slow groth and all fall in Reccission and demand of that countries Good have been fallen also .look it PMI of Euro Region which is now at 35.6%, Uneployment at 7.5%, Manufacturing and service industries contracted at the fastest pace on record in November and economic confidence plunged to a 15-year low. With oil prices collapsing, the inflation rate fell the most in almost 20 years last month, to 2.1 percent from 3.2 percent in October. And According to my thought Unemployment will raise more then 11% in coming year 2009's Q4.
And 2% Interset rate in Euro Region when That currencies lunch in 1999 and now its again nearest to this level and in 2005 ECB take its first step to raise its rate and then Euro was at 1.1600 round about and now rate again come to this side i mean now coming to 2% and in coming year's Last Q it will be Zero that first time Euro facing this time and bring Rate at Zero That will force people to buy dollar against Euro and due to World save havean (although that havean become hell for Whole world in 2007 to till now ) now interst rate at 2.25% and as i think now intesr rate will be come at Zero level that will never as good for Euro but very good for Dollar. So Euro will be sell for 0.0800 .
OILand GOLD
About Oil and Gold both are also fall in future and more commodities will be fall more from Current level due to raising Unemployment rate in all over the world now USA Unemployment Rate at 6.5% and i think it will be at 10.5% in coming days Banks are freeze lending to each other and Stop lending for Cansumer ,Stop lnding for Home,Stop lending for Child Eduction all lendings stop and Cradite Market now all over the World mostly Freeze and Business Lending also Stop and now due to Slow Growth of World and rasing Unemployment eating Demand of World and force Companies to Cut jobs and Maintain its profits, due to Financail Crisis now Banks and other Mortgage companies ,Financial Institutions all cuts jobs, due to falling home values and Raising Subprime losses also forcing Companies to cuts jobs ,Due to Financial Crisis Financial Institution have been Announced more then $950B which will be according to my thought might be hit more then $1.7T and now That all Financial Institute ready to cut Bounes and Divident that is also bad for Cansumers and slowing demand of World according to my thought willbe force Manufacturing companies to cut its Bounes and Divident also in coming days .
Other Hand USA first of all have been Pump more then $160B in shape of Stimuluse Package ,agian Pump $700B for Financial Stabality and now again ready to Pump more then $1T pump for Growth its more bad for whole world no body can mesure how much money need for dealing with this Crisis and much its deep? but This kind of action can provide some cluse to watching how much bad picture of Global Economy and Global Unemployment now at 5% and Forcast about Global Unemployment will reach at 7% but according to my thought it will reach at 8.5% .
If this is condation how can you expect the demand of Commodities will raise ? So Long Short Oil short for $30 to $25 Per Barral in coming days and Gold will reach at $300 Per Ounce in coming days and all commodities will be fall .
STOCK EXCHANGE
Stock Exchange of Major Economies will be loss more then 85% to 90 % values and mostly will be facing fear of Bankreputacy and mostly will be cuts its Bounes and Divident due to Business Lending Stop and New Investment stop and more job creation also stop .World's Largest Exporter Germany now in Reccission ,USA also in Reccission , UK also Facing Reccission ,Japan, France, Itlay etc all in Reccission ,Emerging market which are main contributer of Global Growth in 2007
now Emerging Market Growty also slow due to main market of Emerging Economies's Goods like USA, UK, Euro REGION all in reccission now and cuting Jobs very Sharp .
Global Confidance of Cansumer also fall according to Bllomberg TV Servay Global Confidance now at 23% from 31% in Last month and according to my thought will be at 10 % in next to month and very short wil be reach at -10 when Manufactured will announce now they are ready to cut Bounes and Divident . So Stock Exchange fall more .Long Short Stock Exchange and wait for rasing Confidance .

Hi All,
would you please show me where to find and get news calendar indicator for DailyFX?
Thanks

there are lots of sources, even from the most famous newspapers you can find news affecting directly currencies then trades. Also you can have a support from your broker, take advantage of it, even on holidays there’re news supporting your trades. Adelin

Today's BoE rate cut shows how trading the news can be beneficial but also tricky. Historically a 50 bps rate cut by a central bank would be bearish for the currency, but today we saw the pound rise on the central bank's announcement. However, recent price action has indicated that his might be the case as the Sterling has steadily climbed despite the fact that everyone was expecting the further easing. Traders are sensing that the central bank may be ending or at least pausing its easing cycle. Therefore, previous expectations that a Zero interest rate policy was an inevitability has led to the Pound being oversold and its current retrace.

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John Rivera is the author of Market Brief, Top FX Headlines, and Forex Trading Weekly Forecast on DailyFX.com.