Oct 302008
 

The Forex markets have been known to be very liquid. But today the liquidity was at its lows. Spread on GBP/USD was 15 pips wide for a mere 10 million quote even when London was in full swing. I imagine this must have been the case even yesterday in NY time because the currency just tore straight up. Can you believe it, but Sterling was at 1.6715 on Oct 22, down to 1.5265 on Oct 24 and back here at 1.6670 on Oct 30? This is crazy! Anyway, I am still of the view that Sterling will come off a bit from here. We will probably see 1.6350 in the next few sessions. I know fortune favors the brave. But it will be the foolish who venture into thin markets with big positions.

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