2 Weeks in a Row with a Trade Idea for Shorting FXE

Focus: CURRENCIES

Landon Whaley Image Landon Whaley Editor, Focus Market Trader

Trade idea: This is my second week in a row with a trade idea for shorting FXE, that’s how good I think the opportunity is right now, suggests Landon Whaley of Focus Market Trader.


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Trade Idea: The Guggenheim CurrencyShares Euro Trust (FXE) gained 1.4% in the week ending September 8, and has gained 13.6% for the year!

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According to Bloomberg, Deutsche Bank CEO John Cryan, called for an end to the Eurozone’s easing ways because he is “seeing signs of bubbles” across capital markets. Cryan went on to say, “I welcome the recent announcement by the Federal Reserve and now also from the ECB that they intend to gradually bring their loose monetary policy to an end.”

Well, he got his wish, sort of.

At last Thursday’s meeting, the ECB kept rates unchanged and did not change their policy guidance. However, on Friday, it was revealed that a discussion of various tapering scenarios had taken place during the meeting.

The possibilities discussed by the ECB included: cutting asset purchases to 40B or 20B euros a month with a possible duration extension of six to nine months.


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The euro jackknifed on news of the tapering discussion, even though Draghi didn’t mention it in his prepared remarks.

I remain skeptical the ECB is going to ignore their inflationary problems and step away from the easing button.

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