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Forex Traders May Need To Be ‘More Discriminating” With EM Currencies

Thursday December 26, 2013 11:25 AM

Strategists say they see potential for further greenback gains against emerging-market currencies, although the biggest moves may have already occurred, says Mark McCormick, forex strategist with Crédit Agricole. Marc Chandler, global head of currency strategy at Brown Brothers Harriman, adds that traders might need to become “more discriminating” in choosing their positions. Both strategists say currencies of countries with large current-account deficits or high short-term liabilities may be most vulnerable, listing Brazil, South Africa, Turkey and Indonesia. McCormick also lists the Indian rupee, although Chandler suggested this currency is “beaten up” and could bounce, particularly if candidates favored by investors fare well in spring elections. Chandler and McCormick are both friendly toward the Mexican peso. “I like the Mexico story,” Chandler says. “They are still one of the most undervalued currencies.” While the economy has slowed some, Chandler says he is upbeat due to economic and oil-sector reforms in the country. “And the (economic) recovery in the U.S. should be good for Mexico as well,” he added.

By Allen Sykora of Kitco News; asykora@kitco.com

 

Traders: Platinum, Other Precious Metals Rise Amid Short Covering, Book Squaring

Thursday December 26, 2013 9:27 AM

Precious metals have a firmer tone, which analysts are linking to factors such as short covering and book squaring – particularly an early-morning pop in platinum. “There have been too many bears in the woods,” says George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures. Analysts and many traders have been bearish on gold, meaning potential for traders with short positions to cover, he says. The rises are occurring in thin conditions with U.K. and Hong Kong markets closed, which can mean exaggerated moves, traders say. “It doesn’t take a whole lot of volume in thinly traded markets to move the metals,” said a trader of platinum group metals. As of 9:10 a.m. EST, Nymex April platinum was up $23.40 to $1,360 an ounce. The trader says the move appeared to occur despite no market-moving news, as the uptick was ahead of U.S. initial jobless claims. “We see a lot of this kind of stuff into year-end – book squaring and what-not,” he says. “We don’t put a whole lot of stock in it since nothing major came out in the news.” February gold was up $9.60 to $1,212.90 an ounce, March silver was up 38.6 cents to $19.87 and March palladium was up $7.75 to $703.20.

By Allen Sykora of Kitco News; asykora@kitco.com

 

TDS: Once Seasonal Factor’s Diminish, Jobless Claims Should Show Improving Economy

Thursday December 26, 2013 9:01 AM

Seasonal factors continue to add volatility to U.S. jobless claims but Gennadiy Goldberg, U.S. strategist at TD Securities, says that once this period is over they are expecting the data to show an improving U.S. labor market. On Thursday, the U.S. Labor Department reports that new weekly jobless claims hit 338,000, a decline of 42,000 from the previous report, which was revised up to 380,000. “With labor markets on the mend and consumer confidence on the rise, we look for broader economic improvement to continue pushing claims closer to the 300K mark in early-2014,” says Goldberg.

By Neils Christensen of Kitco News; nchristensen@kitco.com

 

Gartman Bullish On Copper, Would Wait For Consolidation Before Going Long

Thursday December 26, 2013 7:43 AM

Investor and newsletter writer Dennis Gartman says he is bullish on copper but would urge those not already long to wait before doing so after the sharp surge on Tuesday. “It will take several days of sideways movement -- of correction, of consolidation – before we’ll be tempted to add to the position again,” he says. “Nonetheless, that same action has served us well and we’ll not reduce our exposure either.” Gartman, who originally took out a bullish position on Dec. 6, says the aggregate copper inventories stored in warehouses affiliated with the Shanghai Futures Exchange, London Metal Exchange and Comex have fallen to the 550,000-metric-ton neighborhood from nearly 925,000 earlier in the year. “Either mining levels are down, or demand is up, or both,” he says.

By Allen Sykora of Kitco News; asykora@kitco.com

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