Thought it about time we had a separate thread for currency plays.

Charts Currently Removed - New Ones To Follow Soon

Good Reading If You Like FX
http://www.mizuhobank.com/fin_info/exchange.html

Boring....

Shinzo Abe’s Liberal Democratic party has cruised to another election victory in Japan, strengthening the prime minister’s firm grip despite a record-low turnout. The LDP won 291 of 475 seats in the lower house of parliament, the more powerful of the two chambers, roughly matching its performance two years ago, when Mr Abe swept to power on a promise of overcoming more than a decade of deflation. The result is a boost for Abenomics, the prime minister’s three-pronged growth platform, as it buys time to pursue some of the tougher structural reforms to revitalise industry and agriculture. It could also extend Mr Abe’s own reign until 2018, meaning that the 60-year-old conservative could become one of Japan’s longest-serving prime ministers of the post-war period – FT.

The US Senate ended the threat of a government shutdown by passing a $1.1 tln spending package at the weekend, but only after days of acrimony and revolts that are likely to foreshadow more of the same next year. The sprawling package, which was backed by both party establishments, will fund most of the federal government through to September 2015 and now goes to the White House to be signed by President Barack Obama, who supports it. But populist rebellions against it on both sides of the aisle put paid to hopes that Congress was edging towards an era of more constructive bipartisan co-operation before Republicans take control of both chambers next year – FT.

David Cameron is eyeing a deal on Britain’s EU relationship just months before his mooted referendum, as diplomats work towards a “sweet spot” for an agreement in the summer of 2017, the tantalising gap between French and German elections. Mr Cameron believes that a new French president, possibly a returning Nicolas Sarkozy, will be best-placed to help Britain, working alongside Angela Merkel, whose mandate expires at German elections in the autumn of 2017 – FT.

Fitch Ratings cut France's Long-term foreign and local currency Issuer Default Ratings to AA from AA+, resolving the Rating Watch Negative; the outlooks on France's Long-term ratings were Stable. Issue ratings on France's unsecured foreign and local currency bonds were also downgraded to AA from AA+; but Fitch affirmed the short-term foreign currency IDR at F1+ and Country Ceiling at AAA. It acted after not seeing "material improvement" in the "trajectory of public debt dynamics following the European Commission's opinion on France's 2015 budget". The French government announced €3.6 bln in additional budget saving measures (0.17% of GDP) for 2015, which will push down next year's official headline fiscal deficit target to 4.1% of GDP from the previous 4.3% forecast. Budgetary consolidation cannot be "perpetually put off" Jens Weidmann, the president of the German central bank said over the weekend. The head of the German central bank has criticised the EU's decision to give France extra time to sort out its budget, hinting at a disagreement between Europe's two most powerful economies. Weidmann told a French newspaper that he feared last month's decision to give France more time to spell out plans to fix its budget deficit risked giving the impression that EU rules are up for negotiation – MNI. -

Debating a short..

Interesting hourly chart, I'm hoping for a cross for a long position as indices aren't doing much today.

Pound drops

Dollar index

Any effort by the European Central Bank to launch a massive quantitative easing programme this year would fail to revive the eurozone economy, according to a poll of 32 eurozone economists. The survey found that most expected the ECB to launch QE in 2015; catching up with the world’s other main central banks that have all bought large quantities of sovereign debt since the last financial crisis. A stuttering recovery and a worrying drop in inflation have raised fears of another financial crisis in the currency bloc and put pressure on policy makers to cast aside powerful opposition from Germany and begin purchasing sovereign debt; but most of the respondents expected growth and inflation to remain weak even with quantitative easing – FT.

Greece’s political parties embarked on a flash campaign for elections in less than three weeks that Prime Minister Antonis Samaras said will determine the fate of the country’s membership in the euro currency area. Samaras used a Jan. 2 speech to warn that victory for the main opposition Syriza party would cause default and Greece’s exit from the 19-member euro region, while Syriza leader Alexis Tsipras said his party would end German-led austerity – Bbg.

Germany has insisted that it expects Greece to stay in the eurozone, despite a news report claiming Berlin was ready to see Athens quit the common currency if the populist Syriza party wins this month’s snap election and reneges on the country’s reform programme. Der Spiegel magazine reported on Sunday that Chancellor Angela Merkel was abandoning her previous commitment to keeping Greece in the eurozone at any price, and preparing instead for a possible Greek exit in the event that Syriza, which has called for drastic debt cuts and an end to austerity, confronts EU partners with unacceptable demands – FT.

David Cameron hinted a Conservative government could bring forward a referendum on Britain’s EU membership, in a sign the prime minister does not want the question of Europe to dominate a second term in government. Mr Cameron, who has promised a vote by the end of 2017 if his party wins the general election in May, said he would be “delighted” if he could settle the matter before that deadline – FT.

Dollar wagers

Doesn't look like its going to break out of the range, with QE and Greece in turmoil why hold Euros I think will become the question. I await shorting signals to further establish.

Well the EU are clearing the way for QE, an increase in money supply will weaken the Euro, we have Greek elections on the 25th and I wonder how long sanctions against Russia will take before the default (like in 89.) on debt. Certainly any default will crack Germany and forward looking could well be the fatal blow to the entire currency whhooppieeee... So a Euro short against the majors continues to be a no brainer right now. I may extend short positions.

Boom, get in..... Ker-ching...! :-)

Swiss franc soars as Switzerland scraps ban on cap
http://www.bbc.co.uk/news/business-30829917

Barclays loss
on Swiss franc moves

Fall looks overdone and a move back to the 25 day moving average first target now. The market awaits the ECB QE programme due this week.

The ECB will purchase bonds worth €60bn per month until the end of September 2016 and possibly longer - far more than previously expected.

The ECB has also said eurozone interest rates are being held at the record low of 0.05%, where they have been since September 2014.

ECB president Mario Draghi said the programme would begin in March.

He told a news conference the ECB would be purchasing euro-denominated investment grade securities in the secondary market.

He said the programme would be conducted "until we see a sustained adjustment in the path of inflation", which the ECB has pledged to maintain at close to 2%.

No reason not to be short and stay short on this news...

ECB STIMULUS PLAN
Via Twitter Nouriel Roubini Professor at Stern School, NYU tweets: ECB went for a larger QE program (over 1tr euros) in exchange for low risk sharing (only 20% of bonds purchased by ECB, 80% by NCBs [national central banks]) #WEF

All we need now is for Cameron to win the election, take us into the EU fully and watch our savings shrink as they get revalued as Euro's....

Finland’s prime minister opened the door on Thursday to a renegotiation of the terms of Greek debt short of a writedown in the face value owed, ahead of elections on Sunday. Speaking at the World Economic Forum in Davos, Alexander Stubb said that his country could consider extensions to the maturity of the debt and changes in the conditions attached to the debt, but no debt forgiveness. His Irish counterpart, Enda Kenny, the Taoiseach, agreed – FT.

Pound gains strongest level in seven years versus Euro