Trading in progress for 2014

Posted by on Jan 11, 2014 in Commentary, Featured, Market News, News

Trading in progress for 2014

The first full week of 2014 has seen trading activity resume in full. Yesterday, we had the Bank of England and European Central Bank setting interest rate policies for their economies. The UK rates were held, with UK economic news generally continuing to support sterling.

With the US economic growth powering ahead, it has to be reckoned that the Eurozone will eventually arrive at the party and benefit from this growth, in turn returning to growth. However, the Euro was under pressure yesterday as growth is lacklustre to say the least. Probably more accurate to say lacking instead.

That was yesterday. Of course, today was the big economic announcement, the first non-farm payroll figures for 2014. After solid figures throughout last year, leading up to the tapering decision last month, it was perhaps inevitable that sooner or later a set of figures would disappoint. We didn’t have to wait long.

The 1:30 (UK time) wobble for USD came on the back of disappointing jobs figures. Whichever currency pair you chose to trade, you were pretty much ok as long as you were selling dollars. Excepting CAD, which came off worse. But let’s get some perspective on these figures.

The shock value spooked the markets today. But the revision to last months figures was upwards. I suspect we will see an upwards revision next month. I remain of the view that the US economy has some momentum behind it and one months job figures are not enough to stop that momentum. The freezing conditions could cause a further blip in February’s figures though.

My predictions remain dollar strength for 2014 and sterling strength too, with sterling outperforming the dollar in the first quarter. I remain pessimistic on the Euro, Yen and Aussie for now and my views will colour my trading decisions for the first months of 2014.