News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Learn about the importance of the ISM manufacturing index here: https://t.co/Xr3xtoFpZy https://t.co/j5xDAG6LLb
  • While the meetings of central bankers in the US, Japan and the UK will be front, left and center of traders’ minds this coming week, it would be wise not to ignore next Sunday’s German Federal Election. Get your euro forecast from @MartinSEssex here: https://t.co/m920Uvmngm https://t.co/yQYtfHf66s
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1dg6y3 https://t.co/Dqq9S9vGvo
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/lccPTTlvj0
  • GBP/USD’s consolidation could end soon if price breaks out of a symmetrical triangle in play since July. At this time, a downside breakout is likely following the appearance of a death cross. Get your weekly $GBP forecast from @DColmanFX here: https://t.co/WIKdSesfkJ https://t.co/Fx0qr32xgI
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/IRS9MaA7h8
  • The Federal Reserve rate decision is likely to sway the near-term outlook for the price of gold as the central bank appears to be on track to scale back monetary support. Get your weekly gold forecast from @DavidJSong here: https://www.dailyfx.com/forex/fundamental/forecast/weekly/CHF/2021/09/18/Gold-Price-Outlook-Hinges-on-Fed-Rate-Decision-Forward-Guidance.html https://t.co/dWWxtErjK0
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/4qxwiJsV1K
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/stMPuq0VXR
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/v6RGICQvge
Swiss Franc, US Dollar, Yen May Rise on Fear of Maket Closures

Swiss Franc, US Dollar, Yen May Rise on Fear of Maket Closures

David Cottle, Analyst

Possible Market Closure Talking Points:

  • Some London-based fund managers would reportedly like to see markets closed for two weeks
  • This would be rare outside of world war and, perhaps counterproductive
  • Still, even the possibility may boost liquid, anti-risk assets

Anti-risk haven assets like the Japanese Yen, Swiss Franc, gold and government bonds hardly needed another source of support but may have found one in rising levels of chatter that markets might be closed as part of the global coronavirus response, even if the prospect of action must be small.

The Wall Street Journal reported this week that a two-week stock market closure was one measure proposed to Bank of England Governor Andrew Bailey on Monday by prominent but unnamed London fund managers.

This desire may well be understandable. Risk appetite is under severe pressure and it’s hardly surprising that on any given day many succumb to the urge to cash out, doubtless to the annoyance and inconvenience of those managers.

With hundreds of billions of dollars-worth of liquidity primed to support markets, you don’t have to look far to find those who think the bounce-back, when it comes, will be sharp. Those same managers want to be ready for it with as much ammunition to deploy as possible.

Lengthy Market Closures Are Very Rare

However, while market closures in response to certain massive risk events are relatively common, a two-week closure would be the sort of length only previously eclipsed by world war.

The New York Stock Exchange closed from July 31 to November 27, 1914 as what we now know as World War I began. However, seismic events such as the 9/11 terror attack and Hurricanes Gloria and Sandy (in 1985 and 2012 respectively) saw closures measured only in days.

Moreover, there’s an obvious problem with a coronavirus-related closure: no one can say how long it would have to be to do any good. If there were certainty that the contagion could be defeated in two weeks, or a month, then perhaps the closure of markets for that period might make sense. But at present any hiatus would logically need to be open ended to achieve the desired affect of relative market stability.

Such a shutdown would strike at the roots of the very system its supposedly designed to protect, denying investors the right to freely buy and sell assets at the market price.

Moreover, a two-week closure of, say the London Stock Exchange, while other major bourses remained open, might only serve to damage the city’s reputation as a financial hub and that in a post-Brexit phase in which it needs all the burnishing it can get. And there’s little sign of a co-ordinated move. The US Administration’s current stated aim is to keep markets open.

All up then it’s not so much the probability of a London market closure that worries investors, but rather the fact of being in a time when such things can be openly discussed.

Even the rising probability could prompt investors to abandon riskier markets altogether in favour of the liquid, counter-risk assets they’re already largely disposed to favor.

The Swiss Franc is another eye-catching currency market exemplar of this trend, with EUR/CHF already down to lows not previously seen since the summer of 2015.

Euro Vs Swiss Franc, Daily Chart

Even the perception that a prolonged market closure might be possible is likely to accelerate flow into this and other similar-profile assets, like the US Dollar or the Japanese Yen.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES