The U.S. Dollar finished down against most major currencies. From the start it was under pressure as trader demand for risk pressured lower yielding currencies. The early morning weakness in the Dollar helped to drive up demand for high risk equities and commodities. Tuesday’s move by the Fed to leave interest rates unchanged for a prolonged period of time set the tone for today’s weakness.
Overnight the EUR USD traded better on increased demand for higher yielding assets as well as improving conditions in Greece. Early in the session, bullish traders were still factoring in the possibility of a bailout by Germany and France, but this rumor was probably finally put to rest when a spokesman for German Chancellor Angela Merkel’s party said Greece should turn to the International Monetary Fund for aid. After this news the Euro fell back, erasing all of its earlier gains.
The GBP USD was a big gainer. Although this market had broken off its high, it still managed to hold on to an impressive gain. Despite the strong move however, traders have to realize that this is only short-covering and not new buying. Also note that the main trend is still down as no main tops were broken during this current rally.
The initial move to the upside in the British Pound was fueled by a report showing that U.K. Jobless Claims unexpectedly fell in February. The spike to the upside was triggered by the news that the BoE members voted 9 -0 to leave its quantitative easing program unchanged. This news meant that the economy may be improving so much that no new liquidity would have to be pumped into the market. Following this report, a strong up move ensued, driving this market through a pair of 50% levels at 1.5271 and 1.5297. After trading slightly better than these prices, the market has fallen back to test these levels later in the session.
Overnight the Bank of Japan voted to leave interest rates unchanged. In addition, it doubled its loan program designed to combat deflation. The USD JPY traded higher this morning on the news, but failed to hold on to those gains by the mid-session. Stronger demand for equities could not hold the Dollar/Yen higher either. Today’s action indicates that investors feel the move by the BoJ was not strict enough and that additional stimulus may be needed.
The USD CHF traded lower early in the session, but bottomed out after the Euro began to weaken. The direction of the Euro dictated the movement of the Dollar/Swiss throughout the day. The first downside target on the charts was reached last night at 1.0513 overnight, triggering a short-covering rally. The USD CHF came close to making a reversal bottom but nonetheless, today’s action suggests that a short-covering rally may be in the works.
Stronger demand for higher risk assets such as equities, gold and crude oil helped to pressure the USD CAD. Tuesday’s FOMC statement regarding interest rates also indicates that the Bank of Canada may hike rates before the Fed. The trend in this market is decisively lower and likely to continue until this contract reaches parity.
Increased demand for higher yielding currencies drove the AUD USD and NZD USD up. With the U.S. holding interest rates low and the central banks in Australia and New Zealand considering rate hikes, the interest rate differential has shifted back in favor of the Aussie and Kiwi.
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.
Overnight the EUR USD traded better on increased demand for higher yielding assets as well as improving conditions in Greece. Early in the session, bullish traders were still factoring in the possibility of a bailout by Germany and France, but this rumor was probably finally put to rest when a spokesman for German Chancellor Angela Merkel’s party said Greece should turn to the International Monetary Fund for aid. After this news the Euro fell back, erasing all of its earlier gains.
The GBP USD was a big gainer. Although this market had broken off its high, it still managed to hold on to an impressive gain. Despite the strong move however, traders have to realize that this is only short-covering and not new buying. Also note that the main trend is still down as no main tops were broken during this current rally.
The initial move to the upside in the British Pound was fueled by a report showing that U.K. Jobless Claims unexpectedly fell in February. The spike to the upside was triggered by the news that the BoE members voted 9 -0 to leave its quantitative easing program unchanged. This news meant that the economy may be improving so much that no new liquidity would have to be pumped into the market. Following this report, a strong up move ensued, driving this market through a pair of 50% levels at 1.5271 and 1.5297. After trading slightly better than these prices, the market has fallen back to test these levels later in the session.
Overnight the Bank of Japan voted to leave interest rates unchanged. In addition, it doubled its loan program designed to combat deflation. The USD JPY traded higher this morning on the news, but failed to hold on to those gains by the mid-session. Stronger demand for equities could not hold the Dollar/Yen higher either. Today’s action indicates that investors feel the move by the BoJ was not strict enough and that additional stimulus may be needed.
The USD CHF traded lower early in the session, but bottomed out after the Euro began to weaken. The direction of the Euro dictated the movement of the Dollar/Swiss throughout the day. The first downside target on the charts was reached last night at 1.0513 overnight, triggering a short-covering rally. The USD CHF came close to making a reversal bottom but nonetheless, today’s action suggests that a short-covering rally may be in the works.
Stronger demand for higher risk assets such as equities, gold and crude oil helped to pressure the USD CAD. Tuesday’s FOMC statement regarding interest rates also indicates that the Bank of Canada may hike rates before the Fed. The trend in this market is decisively lower and likely to continue until this contract reaches parity.
Increased demand for higher yielding currencies drove the AUD USD and NZD USD up. With the U.S. holding interest rates low and the central banks in Australia and New Zealand considering rate hikes, the interest rate differential has shifted back in favor of the Aussie and Kiwi.
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.
