Stronger global equity markets contributed to the weakness in the Dollar early in the trading session as traders once again increased demand for more risky assets after reassessing U.S. economic data and the odds of an interest rate increase by the Federal Reserve.
The U.S. Dollar finished mixed against most major currencies with the massive losses coming against Pacific Rim markets.
The NZD USD posted a strong gain fueled by the prospect of an interest rate hike sooner than previously expected. In adapting a more hawkish tone at today’s monetary policy meeting, the Reserve Bank of New Zealand said that if the economy continued to improve, conditions may support the removal of monetary stimulus “around the middle of 2010. This last line was more bullish than the previous announcement which said rates would not be raised “until the second half of 2010.”
An additional boost was given to the currency when RBNZ Governor Bollard hinted that he was less worried about the strength in the currency. “We’re now seeing an economy where some of the background conditions are slightly stronger,” said Bollard. “We have been unusually explicit over the last number of statements because we thought we were seeing financial market conditions getting ahead of things.”
The surprise hawkishness by the RBNZ, caught traders off-guard while triggering a strong move overnight. Wednesday’s closing price reversal bottom seems to indicate that today’s hawkish tone was anticipated. The reversal bottom at .7043 was confirmed overnight on the rally through .7206. The main trend on the daily chart turned up on a move through .7299. Gains were limited as this market approached the retracement zone at .7328 to .7401.
The AUD USD posted a strong gain following the release of a better than expected employment report. Overnight the Australian government reported that the unemployment rate fell to a seasonally-adjusted 5.7%. The release of this data helped revive confidence in the global economy.
The USD CHF traded sideways-to-higher following the Swiss National Bank’s monetary policy decision. The SNB left its 3-month target rate unchanged while announcing plans to stop bond purchases.
Stronger equity markets and a bearish economic report helped rally the USD JPY. The drop in core machinery orders in October fueled speculation that deflation will undermine the Japanese economic recovery.
The EUR USD erased all of its earlier gains by the mid-session after traders became more risk averse due to the lack of follow-through to the upside in the stock market. By the close, however, the Euro was able to post a modest gain. This market clearly took its direction from the stock market today.
The GBP USD moved lower shortly before the mid-session as demand for higher yielding currencies stalled, but ended up posting a small gain on late session position evening. This morning the Bank of England left interest rates unchanged while voting to maintain its asset-purchase program.
The USD CAD finished down but remained rangebound between a pair of 50% levels. Better than expected Canadian exports helped maintain the bearish tone in this market throughout the day.
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.
The U.S. Dollar finished mixed against most major currencies with the massive losses coming against Pacific Rim markets.
The NZD USD posted a strong gain fueled by the prospect of an interest rate hike sooner than previously expected. In adapting a more hawkish tone at today’s monetary policy meeting, the Reserve Bank of New Zealand said that if the economy continued to improve, conditions may support the removal of monetary stimulus “around the middle of 2010. This last line was more bullish than the previous announcement which said rates would not be raised “until the second half of 2010.”
An additional boost was given to the currency when RBNZ Governor Bollard hinted that he was less worried about the strength in the currency. “We’re now seeing an economy where some of the background conditions are slightly stronger,” said Bollard. “We have been unusually explicit over the last number of statements because we thought we were seeing financial market conditions getting ahead of things.”
The surprise hawkishness by the RBNZ, caught traders off-guard while triggering a strong move overnight. Wednesday’s closing price reversal bottom seems to indicate that today’s hawkish tone was anticipated. The reversal bottom at .7043 was confirmed overnight on the rally through .7206. The main trend on the daily chart turned up on a move through .7299. Gains were limited as this market approached the retracement zone at .7328 to .7401.
The AUD USD posted a strong gain following the release of a better than expected employment report. Overnight the Australian government reported that the unemployment rate fell to a seasonally-adjusted 5.7%. The release of this data helped revive confidence in the global economy.
The USD CHF traded sideways-to-higher following the Swiss National Bank’s monetary policy decision. The SNB left its 3-month target rate unchanged while announcing plans to stop bond purchases.
Stronger equity markets and a bearish economic report helped rally the USD JPY. The drop in core machinery orders in October fueled speculation that deflation will undermine the Japanese economic recovery.
The EUR USD erased all of its earlier gains by the mid-session after traders became more risk averse due to the lack of follow-through to the upside in the stock market. By the close, however, the Euro was able to post a modest gain. This market clearly took its direction from the stock market today.
The GBP USD moved lower shortly before the mid-session as demand for higher yielding currencies stalled, but ended up posting a small gain on late session position evening. This morning the Bank of England left interest rates unchanged while voting to maintain its asset-purchase program.
The USD CAD finished down but remained rangebound between a pair of 50% levels. Better than expected Canadian exports helped maintain the bearish tone in this market throughout the day.
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.
