So far this week:
The CHF has gained due to a haven bid. With commodities falling and stocks performing poorly, investors are seeking safer havens for the time being. Such investors were not even dettered by the Swiss Unemployment rate rising to 3.4%. However, do not expect this rally in the CHF to last. It will turn around soon. This has set back the GBPCHF long position but expect this to be temporary only. P.s. It doesnt cost to keep this position open, it actually refunds us, so do not worry about transaction costs.
The JPY has outperformed the market this week, in line our expectations. This is temporary relief however and before long the markets should remember just how fragile the Japanese economy really is.
AUD was recovering a little, aided by a small recovery in commodities, this did not last long though. Given disappointing Chinese trade balance data (Australia’s largest trade partner), any recovery will be short lived. Expect this to be further hindered by employment data on Thursday which is expected to show an increase in Australian unemployment.
The NZD is expected to continue falling as thoughts turn towards the RBNZ cutting rates tomorrow and declaring a willingness to do more cuts in future.
This continued fall in oil prices is a massive concern at the moment. If it gets any lower, it may delay the FOMC from starting the normalization process next week. If they do this, it will have the same effect on the market that the ECB did. Only it will be at least 3 times as volatile.