Currency Trading and Intermarket Analysis : How to Profit from the Shifting Currents in Global Markets

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  • Edition: 1st
  • Format: Hardcover
  • Copyright: 2008-12-10
  • Publisher: Wiley
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As head FX strategist at CMC Markets-one of the world's leading forex/commodity brokers-Ashraf Laidi understands the forces shaping today's currency market and their interplay with interest rates, equities, and commodities. And now, with Currency Trading and Intermarket Analysis, he shares his extensive experiences in this field with you. Throughout the book, Laidi outlines the tools needed to understand the macroeconomic and financial nuances of this dynamic field and provides you with insights that are essential to making the most of your time within it.

Author Biography

Ashraf La+źdi is the head FX Strategist at CMC Markets, where he oversees the analysis and forecasting functions of G-10 currency pairs as well as decisions and trends of the major global central banks. His online FX analysis has received wide following for more than a decade, centering on G-10 currencies and economies. Prior to joining CMC, Laïdi monitored the performance of a multi-FX portfolio at the United Nations, assessed sovereign and project investment risk for Hagler Bailly and the World Bank, and analyzed emerging market bonds at Reuters. Laïdi also created the first 24-hour currency Web site for traders and researchers during the inception of the Euro. He is the founder of AshrafLaidi.com.

Table of Contents

Forewordp. xi
Prefacep. xiii
Acknowledgmentsp. xvii
Gold and the Dollarp. 1
End of Bretton Woods System Marks Gold's Takeoffp. 2
Fed Tightening and FX Interventions Rein in Gold Rallyp. 3
Central Banks' Gold Sale Agreementsp. 5
Gold-USD Inverse Relationp. 6
Recent Exceptions to the Inverse Rulep. 6
Using Gold to Identify Currency Leaders and Laggardsp. 8
Gold's Secular Performancep. 11
Valuing Currencies via Goldp. 13
Golden Correlationsp. 14
Don't Forget Falling Gold Productionp. 16
Gold and Equities: Hard versus Monetary Assetsp. 16
Equity-to-Gold Ratiosp. 19
The Role of the Speculatorsp. 21
Gold Is Part of a Larger Storyp. 22
Oil Fundamentals in the Currency Marketp. 25
From a Gold Standard to an Oil Standard (1970s-1980s)p. 26
Oil Glut and Price Collapse (1981-1986)p. 32
The Super Dollar of 1980-1984: The World's Third Oil Shockp. 34
World Intervenes against Strong Dollar (1985-1987)p. 39
Iraq's Invasion of Kuwait and the Gulf War (1990-1991)p. 41
The Asian Crisis and OPEC's Miscalculation (1997-1998)p. 44
Oil Thrives on World Growth, Dot-Com Boom (1999-2000)p. 46
Iraq War Fuels Oil Rally, Dollar Flounders, China Takes Over (2002 to Present)p. 46
Summaryp. 49
When the Dollar Was King (1999-2001)p. 51
The Major Theoriesp. 52
Annual Performance Analysis of Individual Currenciesp. 53
Summaryp. 70
The Dollar Bear Awakens (2002-2007)p. 71
2002: The Beginning of the Dollar Bear Marketp. 71
2003: Dollar Extends Damage, Commodity Currencies Soarp. 78
2004: Global Recovery Boosts Currencies against U.S. Dollarp. 84
2005: Commodities Soar alongside Dollar, Carry Trades Emergep. 90
2006: Dollar Vulnerable as Fed Ends Two-Year Tighteningp. 94
2007: Record Oil Boosts Loonie, Helpless Fed Hits Greenbackp. 102
Lessons Learnedp. 108
Risk Appetite in the Marketsp. 111
Carry Trades in Foreign Exchangep. 112
Using Risk Appetite to Gauge FX Flowsp. 121
Tying It All Together: 1999-2007p. 134
Reading the Fed via Yield Curves, Equities, and Commoditiesp. 137
Yield Curves and the Economyp. 138
Types of Yield Curvesp. 139
Rationale of Inverted Yield Curve Implicationsp. 142
Effectiveness of Yield Curve Signals' Implicationsp. 142
Greenspan's "Conundrum" Proved Bernanke's Problemp. 143
Implications for Growth, Stocks, and Currenciesp. 145
Tying Interest Rates to the Gold-Oil Ratiop. 153
Conclusionp. 158
U.S. Imbalances, FX Reserve Diversification, and the U.S. Dollarp. 161
The U.S. Twin Deficitsp. 162
U.S. Current Account Deficit: Old Problem, New Challengesp. 165
Adding the Budget Balance to the Mixp. 169
Financing the Deficits: The Path to Unsustainability?p. 170
Dissecting U.S.-Bound Foreign Capital Flowsp. 172
U.S. Stocks and Bonds Vie for Foreign Moneyp. 173
Capital Flows Shift Identitiesp. 177
Foreign Direct Investment and M&Asp. 179
How Long Will Foreign Capital Be Available on the Cheap?p. 181
Don't Ignore U.S. Investors' Flows Abroadp. 182
Currency Reserve Diversification: OPEC and the Middle Eastp. 185
Further Currency Diversification Is Inevitablep. 187
The View Aheadp. 189
Commodities Supercycles and Currenciesp. 191
The Current Commodity Cycle versus Previous Cyclesp. 193
Dissecting Commodity Classesp. 196
Commodities and their Currenciesp. 207
Developing World to Maintain Ripe Outlook for Food and Grainsp. 208
Energy Efficiency Not Enough to Halt High Oilp. 214
Copper and Gold to Shine on Long-Term Fundamentalsp. 219
Commanding Heights or Common Bubbles?p. 223
Selected Topics in Foreign Exchangep. 225
Revisiting Yield Curvesp. 225
Is Dollar Stability a Necessity?p. 230
How Far Will Commodities Outstrip Equities?p. 236
U.S. Politics and the U.S. Dollarp. 240
Conclusionp. 247
Bibliographyp. 249
About the Authorp. 251
Indexp. 253
Table of Contents provided by Ingram. All Rights Reserved.

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