Managed Futures Updatefrom Capricorn FX

The general pattern for the start of 2009 was Dollar strengthening as investors took risk off the table.  Market movements were news related and the negative Euroland and UK releases out downward pressure on EUR/USD and GBP/USD.  Liquidity was extremely light which meant that larger orders could easily push the crosses through key levels, and just after mid-month EUR/USD broke 1.3000 and GBP/USD broke 1.4000.  Looking to buy the bounce in EUR

/USD we initially went long as the cross first approached 1.3000, however as momentum slowed on the upside we closed the position in profit and decided to wait for another trade opportunity.  This came a week later as we went long at 1.2874 and gained 274 pips during a 2 day EUR/USD rally.  With a monthly gain of over 300 pips we decided to remain neutral for the remainder of the month.
   

The three positions of the portfolio for the month of January were in NZD/CHF, NZD/USD and NZD/JPY.   With the 'financial crisis' deepening globally, the fluctuations in currency majors were volatile leading to further 'unwinding' of 'carry trades'.  JPY strengthen across the board and the commodity link AUD and NZD continued their decline.  Despite this environment the strategy performed strongly as we lifted some of the 'Long' hedge during the beginning of the month.  This meant that the strategy captured some of the 'Short' directional trades thereby improving the return.

The Disclaimer

Information contained herein was obtained from sources that we believe to be reliable. You may refer to it, but we do not guarantee its accuracy or completeness. This information is provided on condition that we accept no responsibility, legal or other for its contents, We, including our directors, officers, employees or publishers, disclaim all liabilities. Any statement constitutes only current opinions, which are subject to change. Neither the information nor any opinion expressed shall be construed to be, or constitute an offer to sell or a solicitation of an offer to buy any investments mentioned herein. Prices can go down as well as up. There is a significant risk involved in derivatives trading, and this could lead to a loss of all monies deposited. Past performance is no guarantee of future results.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. PRICES CAN GO DOWN AS WELL AS UP. THERE IS A SIGNIFICANT RISK INVOLVED IN FX TRADING. CONDITIONS CAN VARY FROM CLIENT TO CLIENT, AND THEREFORE INFLUENCE PERFORMANCE.