$ For The Week of 12/4-With Trade Ideas

The Big Difference Is On:

It's about where expansion is going

That's gonna be the focus on what the Fed is gonna do. Bernanke's trustworthiness is on the line here. The Fed expects growth to be at a moderate level, but with this week's production numbers, what is the outlook now for future expansion?

One Fed govenor has spoken about this and he is making a fair point-you can't judge the market on 1 or two numbers production numbers, if manufacturing is about 12% of GDP. There are production places that do show growth. Core inflation remains above where they would like it to be. Here's a quote in the post:

Plosser, a non-voting member of the Federal Open Market Committee this year, stated in a Nov. 28 speech which the market is”performing fairly well” outside of housing and will probably rebound in the third quarter, when it enlarged the least this year. Growth will return toward a 3 percent annual growth pace next year, '' he explained. Plosser reiterated that outlook today.

”If that's true, I am still worried about inflation,” Plosser told reporters now.


The Fed's point is that expansion is gonna cheapest outside in the 3rd quarter, be moderate, then go back to more normal levels later in 2007. If that plays out inflation probably remains an issue. But here is what is important for you as a currency trader; the reverse likely holds true too. As expansion gets poorer (if that occurs ) inflation becomes less of an issue. The weakens.

Therefore there are a lot of factors weighing on the now, but expansion and it is projected management weigh heaviest. The final 3rd quarter GDP revision is very likely to be lower which may get priced in. Greater expectations of a past and March rate decrease. Our urge for weakening based on problems with China and the current account. However, if there was a green light for weakness-this one certainly would be up with all the brightest:

Plosser also told reporters that”I do not see inflation pressures coming from a falling dollar.”

Hey in case you're gonna trade on the grounds of a couple of weeks, u gotta look at this and take a fairly good guess about where the $ is about. Does that mean that your position will go to profit? No. Could you see that a 100 pip or more drawdown in case you were to buy at this time? Sure. However, I fell certain that there's another 200 to 400 points offered here. In case you've got the chutspa. . .go for it. In case 30 pips is gonna permit you to tear your hair out, then stay away. But if you handle your account so that 80 pips or so only represents about 2-3percent of your acount-you'll be good to go. You could always buy more if you're profitable.