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[primarylogic]

E/U droped 150+ pips in 30 minutes, it's too crazy.

US Dollar Rallies As Fed Chairman Bernanke Issues Hawkish Speech, Focuses on Dollar


* Jun 03 - US Dollar Rallies As Fed Chairman Bernanke Issues Hawkish Speech, Focuses on Dollar
* Jun 03 - Euro Tightens Ahead of Looming Break-Out
* Jun 01 - Dollar: Will Non Farm Payrolls Spoil the Rally?
* May 30 - Carry Trade Gains As Yields Turn Higher, Global Growth Outlook Improving
* May 29 - Euro SSI Suggests Records Highs Are Out Of Reach
* May 28 - Market's Bull Run Stalls As Growth Concerns Weigh On Rate Outlook
* May 27 - How Will the Search for a 'New Libor' Impact Carry Trades?
* May 27 - US Fed: Inflation Expectations Rise as Oil, Food Prices Prove to Be More Convincing Than Bernanke
* May 23 - Euro May Retest 1.60 If German Data Meets Expectations
* May 23 - Rebound In Carry Trade Hits Resistance As Risk Appetite Falters
* May 22 - How Does an Oil Crisis Impact the US Dollar?
* May 21 - Will the Australian Dollar Hit Parity?
* May 21 - FOMC Minutes Reveal April Rate Cut Almost Didn't Happen, Pause In June
* May 21 - BoE Voted 8-1 To Keep Rates Unchanged
* May 20 - Australian Dollar Sets 24-Year High, Eyeing More Upside
* May 18 - Dollar: Another Test of 1.60?
* May 16 - British Pound in Early Stages of Large Bull Move
* May 15 - Pound Positioning Holds Net Long With 1.94 Support In Sight
* May 14 - Why The Euro Could Continue To Fall
* May 14 - Traders Bet The Fed Will Hold As Credit, Growth Outlook Improve

Written by Terri Belkas, Currency Analyst

During a scheduled speech at 9:00 EDT at the International Monetary Conference in Barcelona, Federal Reserve Chairman Ben Bernanke issued hawkish commentary and focused on the value of the US dollar, which was somewhat unusual as he has said little regarding the currency even as it hit record lows just over a month ago.

In the speech, Bernanke suggested that further rate cuts would be unnecessary, as “policy seems well positioned to promote moderate growth and price stability over time.” Unsurprisingly, he said that high inflation pressures generally reflected “sharp increases” commodity prices, and while “pass-through” to wage costs and consumer prices were limited, “the continuation of this pattern is not guaranteed and will bear close attention.” However, Bernanke’s pronounced focus on upside inflation risks from continued gains in commodity prices were the most hawkish comments at all. In fact, there is now a fear within the Federal Reserve that the public’s long-term inflation expectations will rise, and “could ultimately become self-confirming.” Just last week, Fed Vice Chairman Donald Kohn expressed similar concerns, and it is becoming clear that the central bank is having difficulty managing these inflation expectations, as record high oil prices prove to be a bit more convincing.

Meanwhile, Bernanke also noted that the Federal Reserve is aware of the negative implications of a weak dollar on inflation and inflation expectations. However, he expressed confidence that the Federal Reserve’s dual mandate to foster maximum sustainable employment and price stability would be a key factor to ensure “that the dollar remains a strong and stable currency.”

The US dollar has surged since the beginning of the speech, as the currency is up 150+ points versus the euro and Swiss franc, and up 100+ points versus the Japanese yen and British pound. Fed fund futures – which were pricing in only a 2 percent chance of a 25bp rate cut in June – are now fully pricing in no change in rates.

[FerruFx]

Originally Posted by TaoJin88

EU lost more than 100 pips today, too bad that I did not have enough money in my account and it was closed by the system again! If I did it right, I will earn more than I lost yestoday

If you had a margin call after a 100 pips DD, you must have a lot size problem. Your risk is too high.

FerruFx

[Alizain]

well, generally loss on some trading is normal when trader open a trade position on a market. I recommend to put SL around 50 pips for each position. just to make other remember, don't hesitate to close (cut loss) if you are feel your position agains market movement.

[primarylogic]

Originally Posted by Alizain

well, generally loss on some trading is normal when trader open a trade position on a market. I recommend to put SL around 50 pips for each position. just to make other remember, don't hesitate to close (cut loss) if you are feel your position agains market movement.

yes, S/L and entry point are very important.

I follow 2 rules to open a position:
1 - S/L < 0.05M
2 - if entry point over my S/L, i don't trade.

[TaoJin88]

I got 10 lots bonus, that is 100USD, great!

[Alizain]

Originally Posted by primarylogic

yes, S/L and entry point are very important.

I follow 2 rules to open a position:
1 - S/L < 0.05M
2 - if entry point over my S/L, i don't trade.

Good rules for money management

[Alizain]

Originally Posted by TaoJin88

I got 10 lots bonus, that is 100USD, great!

congratulations Taojin, that's equal with around 100 pips for 0.1 lot trade on standart account

[primarylogic]

Euro Rallies As ECB's Trichet Says They May Raise Rates Next Month


The European Central Bank left rates steady at 4.00% this morning, in line with expectations. However, in ECB President Jean-Claude Trichet's subsequent monthly press conference, it is clear that the central bank remains hawkish as he said that some council members actually wanted to raise rates.

Indeed, during the Q&A session, Mr. Trichet went so far as to say that there is some potential that the central bank will raise rates next month. Meanwhile, he said in a speech that "risks to price stability have increased further" and that the ECB is in a state of "heightened alertness," which is a new phrase that we haven't seen in his commentary. Furthermore, despite recent declines in various measures of Euro-zone services and manufacturing sector growth, Mr. Trichet called the economic fundamentals "sound." In fact, the ECB is a bit more optimistic on economic prospects for the region, as 2008 growth forecasts were revised up to 1.5% - 2.1%, from 1.3% - 2.1%. On the other hand, the ECB foresees a slowing in the economy in the longer-term, as they revised their 2009 forecasts down tp 1.0% - 2.0% from 1.3% - 2.3%. Overall, it is clear that the ECB has absolutely no intention of cutting rates this year, and in fact, there is greater potential that because the bank's primary mandate is to focus on price stability, they may actually hike by 25bps next month to 4.25%.

Unsurprisingly, the comments have been supportive of the euro, especially against the US dollar and Japanese yen

[TaoJin88]

the data from USA is too bad today, EU is going to 1.6 this time, I think! So crazy it is!

[primarylogic]

E/U is crazy, up 400pips in two days.