The Forextravaganza is drawing to a close for another year and we had a very enjoyable time here in the FXDD offices in New York. It was great to catch up with some of our readers; all very interesting people from very different backgrounds.
Jim Trott, formerly of the Bank of England, gave some very interesting insights into the CB commmunity. My impression of his comments were that he thinks the SNB is making a mistake to try and draw a line in the sand at 1.2000 in EUR/CHF (and he should know after September 1992!!). The BOJ are making lightning raids to keep the market alert rather than trying to drive the JPY immediately lower; and the ECB faces some unenviable choices.
Dan Brehon from Deutsche Bank also gave some very insightful analysis into the short-term and medium-term prospects for the EUR/USD.
Overall an extremely interesting evening and the view I took away from it was that the market is very bearish and very short of EUR, and while this is the case it will struggle to fall too far. If the ECB (perhaps in conjunction with other central banks) were suddenly to announce a plan to buy Italian bonds for an extended period at an agreeable rate, then we could possibly see a teeth-rattling short-covering rally.
Care advised in my opinion.
