http://www.forex.com/uk/post?SDN=bc975b3b-7218-42e3-99df-ea3003ea8492&Pa=20db1fa6-e674-420c-9a87-2ee29261d638
It’s been an extremely quiet end to the year, as expected. Most European equity markets are either closed or are closing early; hence stocks have moved only a fraction. It looks as though the FTSE 100 won’t finish the year above 6,000 as some may have thought. It is trading softly on the last day of the year, but that doesn’t take away from its solid 2010 performance when it rose 10 per cent driven by the mining sector. Global stock markets have had a good year and gains are now expected to extend into at least the first half of 2011. Equities are expected to be driven by a strong outlook for global growth and revised expectations for US growth post the extension of the Bush-era tax cuts.
Forex is the one bit of life in financial markets today. The dollar continues to trade softly and EURUSD is now above 1.3300. We haven’t seen the capitulation in the single currency that some expected even as the peripheral debt crisis imploded. This reinforces our belief that this remains fundamentally a credit crisis rather than a currency crisis for the currency bloc. This leaves the euro in a stable position as we move into 2011.
The Swiss franc and Japanese yen are also ending the year on a high (for the Swissie a record high) against the greenback and the euro. Commodity currencies are also strong. Rising commodities have been a key theme this year, so it is no surprise that we end the year with the Aussie dollar at parity. However, the 1.0200 mark remains elusive and until it sustains a break above here a long Aussie position is worth keeping a very close eye on. The Kiwi dollar has had a strong December and continues to trade higher. It is currently at 0.7750/60 and could reach prior highs of 0.7970/0.8000 before running out of steam.
Overall, the next few days are a good chance to review and consider what will be the main themes for 2011. We will publish our 2011 outlook on Tuesday 4 January when the next London session will also be published.
Forex is the one bit of life in financial markets today. The dollar continues to trade softly and EURUSD is now above 1.3300. We haven’t seen the capitulation in the single currency that some expected even as the peripheral debt crisis imploded. This reinforces our belief that this remains fundamentally a credit crisis rather than a currency crisis for the currency bloc. This leaves the euro in a stable position as we move into 2011.
The Swiss franc and Japanese yen are also ending the year on a high (for the Swissie a record high) against the greenback and the euro. Commodity currencies are also strong. Rising commodities have been a key theme this year, so it is no surprise that we end the year with the Aussie dollar at parity. However, the 1.0200 mark remains elusive and until it sustains a break above here a long Aussie position is worth keeping a very close eye on. The Kiwi dollar has had a strong December and continues to trade higher. It is currently at 0.7750/60 and could reach prior highs of 0.7970/0.8000 before running out of steam.
Overall, the next few days are a good chance to review and consider what will be the main themes for 2011. We will publish our 2011 outlook on Tuesday 4 January when the next London session will also be published.
Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
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