The EUR USD posted a sizable gain. Tuesday's supportive comments from European Central Bank President Trichet were not enough to stop the Dollar’s slide today. Matters weren’t helped after Luxembourg premier Jean-Claude Juncker said that the Euro’s rally hasn’t hurt the Euro Zone recovery. This comment gave traders the green light to drive the currency higher. If upside momentum continues at the current pace, we could see a test of 1.5063 tomorrow.
The GBP USD traded lower on Wednesday. This was triggered by a negative reaction to the Bank of England minutes and overbought technical conditions. Traders reacted to the news from the BoE minutes that the vote was split regarding the recent expansion of the central bank’s quantitative easing program. The initial reaction to the split vote was positive as it suggested the bank would not expand further. The market, however, broke after a follow-through rally failed. Traders looked for the safety throughout the New York session while they sorted out the data from the minutes report.
The U.S. reported an unexpected drop in Housing Starts. This bad news kept downside pressure on the equity markets throughout the trading session. The choppy trade in the U.S. Equity markets created see-saw movement in the currencies throughout the day. Traders didn't know whether to buy the dips in the Dollar in anticipation of a drop in equity markets or to sell more Dollars.
The AUD USD and NZD USD attracted selling pressure throughout the session because of the weaker equity markets. These two currency pairs are vulnerable to hard breaks should the stock markets begin to sell-off. The Aussie is still seeing weakness after the Reserve Bank of Australia minutes suggested that a rate hike over the short-term is not likely.
Higher gold and crude oil supported the Canadian Dollar early in the trading session, but the move fizzled when gold began to weaken. This morning, it was reported that Canada’s consumer price index rose last month but this report was in line with expectations. The Bank of Canada is not too concerned about inflation, but rather the value of the currency. Throughout today's early session rally traders seemed tentative about pushing this currency higher. The fear is that the BoC will implement a strategy that will push down the value of the Canadian Dollar.
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DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
The GBP USD traded lower on Wednesday. This was triggered by a negative reaction to the Bank of England minutes and overbought technical conditions. Traders reacted to the news from the BoE minutes that the vote was split regarding the recent expansion of the central bank’s quantitative easing program. The initial reaction to the split vote was positive as it suggested the bank would not expand further. The market, however, broke after a follow-through rally failed. Traders looked for the safety throughout the New York session while they sorted out the data from the minutes report.
The U.S. reported an unexpected drop in Housing Starts. This bad news kept downside pressure on the equity markets throughout the trading session. The choppy trade in the U.S. Equity markets created see-saw movement in the currencies throughout the day. Traders didn't know whether to buy the dips in the Dollar in anticipation of a drop in equity markets or to sell more Dollars.
The AUD USD and NZD USD attracted selling pressure throughout the session because of the weaker equity markets. These two currency pairs are vulnerable to hard breaks should the stock markets begin to sell-off. The Aussie is still seeing weakness after the Reserve Bank of Australia minutes suggested that a rate hike over the short-term is not likely.
Higher gold and crude oil supported the Canadian Dollar early in the trading session, but the move fizzled when gold began to weaken. This morning, it was reported that Canada’s consumer price index rose last month but this report was in line with expectations. The Bank of Canada is not too concerned about inflation, but rather the value of the currency. Throughout today's early session rally traders seemed tentative about pushing this currency higher. The fear is that the BoC will implement a strategy that will push down the value of the Canadian Dollar.
Contact Us:
Local: 312-896-3930
Toll Free: 800-971-2440
Email: Info@BrewerFX.com
Website: www.BrewerFX.com
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
