Buy the rumour, sell the fact

Author: Sean Lee | Category: News

Last night the ECB did exactly what the EUR bulls had anticipated and signalled a rate hike next month, and of course the EUR fell.

A bigger event which the market has been preparing itself for is the end of QE2 and of course the market has positioned itself accordingly; loading up on CHF and JPY to a lesser extent; offloading AUD long positions and even going short to some extent; and holding onto EUR rather than USD or GBP.

The risk now is that once the QE2 end nears, and the earth is still revolving, we may see a race to exit these trades above. That could mean a serious bump for the CHF bubble because if everyone starts to exit at once, the doorway will be rather narrow.

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