- Diversifiy away from GBP.
The Bank of England is set to remove quantitative easing later this year, the UK Treasury talks about spending cuts, the new VAT coming through in 2010 and the down-and-dirty British Elections are due in May. None of these developments is good for sterling and the UK economy which has yet to recover from recession. Therefore, sterling may regain its status as the whipping boy of FX in 2010. Although I still reside in London, I'll look to diversify into USD in the first half of the year, then look for fresh entry levels into investments based in SGD, silver and gold.
- Get more Coins.
My bullishness in gold and silver over the past 4 years has been limited to ETFs. I’m not sure what to make of a single ETF company holding bullion more than 90% of central banks, but this would be the time to invest in gold and silver coins. There are many firms out there that are in charge of the storage, which would not only diversify into metals but also serve as an offshore alternative of your assets.
- Refine the Intermarket Way.
While the bulk of the intermarket dynamics covered in my book “Currency Trading & Intermarket Analysis” remained valid throughout 2009, it is important to refine our understanding of these relationships and use them as a way to improve the timing of upcoming developments in FX, oil, metals & interest rates. The decline in the triple top in the Oil/EURUS ratio enabled us to call the protracted decline in crude and the ensuing retreat in EURUSD. Tune in for more calls and trend-changing signals.
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Ashra Laidi is Chief Strategist at CMC Markets. He oversees the analysis and strategy functions of key currency pairs as well as decisions and trends of the major global central banks. He is also responsible for educating and informing clients on the essential dynamics underpinning FX, Commodity and Credit markets. [More about Ashraf Laidi]
