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Sunday, Jan 11, 2009
9:00PM Philippine time

Where do you place your money in 2009? Is what most investors are asking. Since November last year, most investors were content after huge losses to just keeping it in cash specifically in US Dollars. But start of 2009, and the start of the Presidency of Barak Obama is giving more and more people hope and optimism that 2009 will not be so bad. Many successful investors interviewed by Bloomberg over the weekend including the famous Gloom, Boom and Doom Marc Faber said that there will be a bit of a bounce in the US markets in the first quarter… but inevitably it will resume it’s downward spiral as fundamentals are not good at all.

First off, I would agree that many people are tired of the double digit declines that their investment portfolios have suffered in 2008 and are looking to re-coop their losses which will lead to a small bounce in the next 3 to 6 months. I believe like many investors that the market has already baked in all the bad news “Yes we know, it’s bad”. Now because of this, I believe money will be returning in to the markets although slowly and cautiously. (Unless another Major bank collapses, all bets are off)

Now how does this translate to currencies? Well, with interest rates going down in all countries led by the US, carry traders are looking at the remaining higher yielding currencies to buy and these are. AUD, NZD, GBP, EUR. I would also think that JPY will continue to strengthen against the USD as a safe haven currency for those who are still on the fence. Out of all these currencies the GBP seems to have the most potential as the interest rate easing done last week slowed somewhat with possible rate cuts looking less likely. The fate of the Euro on the other hand all depends on how stubborn Trichet will be when he talks this week.

For What currency pairs Mark is trading this week, please log in to http://www.forexclubmanila.com

Monsterpips to All!

-Mark  So