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FX Weekly: 5th December 2011

Sunday, December 4, 2011 Add Comment Edit

Oil and Gold remain the most volatile contracts as risk tolerance reversed course. Commodity currencies and Scandies were the pack leaders last week in G20 FX – most strength seen against USD and JPY
ECB expected to cut interest rates again (Thu) and provide additional liquidity. Political progress also a key focus – full fiscal union would be hugely EUR/USD positive
Periodic Chinese activity data could be crucial if global economic slowdown is worse than feared
On the political front, near-term focus is on Italy’s reform agenda to be unveiled today and on the new Spanish government’s program once it takes office on December 22nd
Multiple central bank meetings coming up: RBA and BoC on Tuesday, followed by RBNZ, BoE and ECB on Thursday. The RBA could be market moving because a cut is fully priced but the bank may not ease so soon after its previous move

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