Forex volume of trade and volatility
were both down during the first week of trading in August. This has had the
effect of creating lacklustre moves in the major pairs, such as the EURUSD,
which is not conducive to trading. Apart from the lack of the kind of solid
moves we like in order to profit, these trading conditions create a thin
market. This increases risk.
US
jobs report maintains interest rate expectations
The US Non-Farm Payrolls report came
out on Friday, as it always does on the first Friday of the month. It came in
at 215k new jobs, as against 223k previously, and as also expected for this
time around. The failure to hit the expected figure was not regarded by the
market as serious, as the number was in excess of 200k. The US dollar initially
benefited on the news, because it did not work against the prevailing belief
that there will be at least one interest rate rise this year, but the gains
were later given back, as can be seen from the chart above.
The failure of the NFPs to initiate a
decisive and sustained move, in either direction, is another indication of low volatility
summer trading.
Be careful out there.
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