Interview: Trading The News With Adam Button by Jayanthi Gopalakrishnan
Forex With A View
Adam Button is the managing editor of ForexLive, a website devoted to foreign exchange news and analysis. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Button believes there’s an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. He lives in Montreal. He frequently writes and teaches about technical analysis, economic data, and intermarket dynamics. He was awarded the Forex Person of the Year 2014 by FXStreet.com.
STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke with Adam Button on January 20, 2015 about the importance of being in tune with the news when trading the forex market.
Why do you think the SNB made that move? Isn’t it unusual for a central bank to make an unexpected surprise announcement to place a cap on its currency?
Yes, it absolutely caught the market off-guard. You won’t find anyone who had warned about the event happening. Of course, in hindsight, some of the signs were there. If you look a the chart of the euro/Swiss franc, you’ll see that it has been in a free fall (Figure 1). And the European Central Bank (ECB) right now is on the verge of unprecedented monetary stimulus, which will cause further weakness in the euro. The size of the Swiss currency reserves was at 80% of GDP. So the signs may have been there, and two days before the decision, the SNB deputy said they were a cornerstone of the monetary policy.