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"Smash and grab" FX trades but which one?
No clear frontrunner exists in the currency market at the moment. The absence of trends has produced a subdued market. Low volatility frustrating many FX traders. The euro dollar is a good example, it accounts for a quarter of global foreign exchange turnover, but has been trading within a tight range for much of the past year.
Ken Veksler, Director of Accumen Management says with only a few weeks left in the calendar year, currency trading is likely to be focused on securing small and brief wins or "smash and grab."
He says data releases and financial related announcements will produce large spikes in trading volume. But it will be whomever has the "cash to push the market around that will lead with everyone else playing catch up."
Veksler does express some optimism for a select few currencies. The Sterling, Aussie dollar and the Aussie, Kiwi dollar are three trades that still may have a little meat left on-the-bone at the moment. The Euro dollar on the other hand is equivalent to picking “a broken nose” according to Veksler.
Sterling is currently hovering around 1.6 and Veksler estimates frequent trading within the 1.59 – 1.625 range. This doesn’t provide much action at the moment, but is one currency Veksler will be keeping a close eye on.
The Aussie, Kiwi dollar, which is sitting at a relatively low level, could prove the potential for a decent upswing. Veksler suggests evaluating whether or not the current levels are justifiable.
01:37 minutes
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