Short NZD/USD trade 20 to 25 August
Real Time AmpGFX – closed NZD/USD short (Fri 8/25/2017 8:28 AM MDT)
Bought one unit NZD/USD at 0.7244 to close short position, no positions current.
The JH speech by Yellen has no implications for policy speaking mainly of safe guards and regulation since the GFC on banks.
I am not confident that the USD will perform well in light of Trump’s threats to shut down govt to try and get border wall financing.
Real Time AmpGFX – lowering NZD/USD orders (Wed 8/23/2017 7:06 AM MDT)
Position
Short one unit NZD/USD at 0.7311; s/l 07287; t/p 0.7055
Comment
I am rolling the stop loss down in NZD/USD, to lock in some tentative gains.
Chart wise, the NZD/USD may be taking on possible head-and-shoulders top, so moving t/p lower to capture this potential
Comments from Trump at his Atlanta rally are pretty much what we should have expected. But they do not make us comfortably long USD. Reports suggest he is threatening Govt shut-down to get his border wall funding. The focus remains shoring up his base, not tax reform.
All we can say is that the US economy has proven very resilient despite a divisive and erratic Presidency.
NZD may be building in some of political risk with under-performance in the last day.
I am still in London this week, back in my office from next week. Time is limited to feel like I am covering all bases. Some risk around the NZ Trade data tonight, and obviously the JH speeches on Friday (during which I will be travelling back to the USA)
Real Time AmpGFX – sold NZD/USD (Sun 8/20/2017 2:26 PM MDT)
Sold one unit NZD/USD at 0.7311
Position
Short one unit NZD/USD at 0.7311; s/l 07387; t/p 0.7155
Comment
US data in recent weeks has generally been stronger than expected. The Atlanta fed GDPNow estimate is for 3.8% growth in Q3.
The Jackson Hole symposium later this week may reinforce the notion that the Fed may continue to tighten policy to address easing financial conditions.
Even though the equity market has weakened in recent trading, overall US financial conditions remain very easy.
This was a theme NY Fed Pres. Dudley used to argue in favour of hikes earlier in the year. Dudley continued to say he would support another hike this year, in comments made last week. He tends to be a key mouth piece for policy direction. Yellen is reported to be speaking on the topic of financial stability at the symposium, which lends itself to laying the groundwork for a possible further hikes, even if inflation remains low.
Bannon gone, TS Mnuchin backing Trump, we may see heightened fear around the Trump administration ease. However, it is a risk with Trump addressing a rally in Atlanta on Tuesday. And US military exercises with South Korea scheduled this week.
There is increasing discussion around Chinese stiffening controls on capital outflows, and the NZ property market has weakened significantly this year.
Political risk remains for NZ.