Forex Video : USD Short-Term Weakness

On CNBC Squawk Box ACM Advanced Currency Markets Chief Market Analyst Peter Rosenstreich discusses the USD meltdown and continued weakness and the underlying rationale for JPY strenght.

RSS VIDEO FEED

Name: Peter Rosenstreich
Title: Chief Market Analyst
Company: Advanced Currency Markets
Date: 07/03/2008
Time: 07:25 CET
Channel: CNBC Europe
Duration: 3 mins 2



Geoff Cutmore

Let’s pick up that conversation on the currencies. Let’s get out to Peter Rosenstreich. He’s the Chief Market Analyst at Advanced Currency Markets. Peter, do you believe that lack of a clear winner at the Bank of Japan is having an impact on the way the traders are moving the yen?

Peter Rosenstreich

Well, it doesn’t seem like that’s the case, because the yen would probably go the other way, it would be losing strength, if we were trading on the fundamental government uncertainty and chaos that’s reigning in Japan right now. That’s not what we’re seeing right now, so I think the yen is trading on the larger environment, the macro themes, the dollar weakness; the uncertainty in the global markets, as well as slowing growth in 2008, is more the trade than the actual underlying fundamentals that are going on internally in Japan.

Geoff Cutmore

What do you think the connection is between the way the dollar’s going to move and the non-farm payroll number today?

Peter Rosenstreich

Well, I think the dollar’s under significant pressure. There’s enormous bear sentiment out there on the dollar. The economic indicators that we are seeing coming out of the US continue to un-impress and keep on showing there’s continued downside risk in the US economy. I think the numbers that are going to come out, in non-farm payrolls, are probably going to come under the 25k that’s expected, looking at ISM and ADP figures. That will continue to weaken the US dollar, so we’re going to see it lose strength across the board.

Martin Baccardax

Peter, is there anything to currency movements that isn’t dollar negative at the moment? I ask only because it just surprised me to see cable go over the $2 mark yesterday. It certainly doesn’t appear to me that that’s on the back of sterling strength. Is it literally all the dollar negativity at the moment that’s driving the pairs?

Peter Rosenstreich

As an analyst, I wish that there really was more to talk about, but unfortunately, this is really the story, and that’s what the market should be paying attention to: how the dollar’s performing against many of these other currencies. There was a little bit of emphasis on, say, the BOE and ECB yesterday, Trichet’s sort of overly hawkish comments which, actually, help the Euro gain its own support. Overlying, it’s the dollar weakness story that’s really defining how the currency markets are trading right now.

Geoff Cutmore

Trade for the day, Peter, before we leave you?



Peter Rosenstreich

Trade of the day: you know, I’m still looking for dollar weakness. I would be looking a little bit over in the commodity block: Aussie, Kiwi, CAD. Note, to some extent, I think they’ve underperformed because of the selling against, say, the yen trade, but I think they’ll start catching up a little bit more, especially with the moves that we’ve seen in the Euro as well as the cable. I think the Aussie/Kiwi trade is probably one of the stronger against the dollar right now.

Geoff Cutmore

Peter, good to see you. Thanks for your time, Sir. Peter Rosenstreich, Chief Market Analyst at Advanced Currency Markets.

Peter Rosenstreich

Thank you very much.