Running out of safe havens - FX Solutions Market Update, 2nd August 2011

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Date: Tue, 16 Aug 2011 Time: 9:15 AM
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Tommy Molloy is Market Strategist at FX Solutions (http://www.fxsolutions.com/). As an expert in forex trading, he regularly uses his knowledge of the markets to provide Forex traders with an overview of news affecting currency movements. Here, he analyzes activity around the Yen, Australian Dollar and US Dollar.

"Traders have a lot of information to process in the FX market today. In USD/JPY the "intervention flag" has been raised by the MOF, and the chorus of Japanese exporter complaints has grown louder overnight. Toyota added their protest at Yen strength, saying they want Japanese authorities to do more to stem the rise of the Yen.

Elsewhere the IMF stated that it estimates the Australian Dollar (a recent bastion of strength) is 10-15 % over-valued. This added to a correction which had started on the "no-change" announcement by the RBA on official interest rates.

In Europe we have further deterioration in sentiment towards the periphery nations, both Spain and Italy have both been feeling the effect of this deterioration and CDS spreads have started to move out again.

The market is running out of safe havens. JPY has the added risk of intervention. IMF has decided that the AUD is 10-15 % over-valued. The USD is fraught with debt and longer term deficit concerns. The EUR is struggling to cope with debt and deficit concerns of its own. In this environment Gold has started to shine once more and the yellow metal has added $18.00 to its price overnight. This is a reflection of the fiscal fears in the market, and unless things change, investors and traders will continue to seek out safe havens."

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About FX Solutions

FX Solutions is a leading online foreign exchange broker with a focus on advanced trading technologies, transparency of transaction and unparalleled customer service. FX Solutions serves retail clients, white label partners, institutional trading partners and introducing brokers in over 140 countries.

FX Solutions' products are regulated in the United States, United Kingdom and Australia. FX Solutions in the United States is regulated as a member of National Futures Association, and registered with the Commodity Futures Trading Commission as a Futures Commission Merchant. In the United Kingdom, FX Solutions is a registered trading name of City Index Limited which is authorized and regulated by the Financial Services Authority. FX Solutions in Australia is a registered trading name of City Index Australia Pty Ltd. which is authorized and regulated by the Australian Securities and Investments Commission.

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