Tuesday December 7, 2004 - 11:05:54 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Dollar faces tough resistance
There will be further caution over the threat of intervention by Japanese officials below the 102.0 level and this will tend to limit aggressive dollar selling for now. The longer-term trends will remain dollar negative, especially with the potential for a selling of US bonds. Overall, the dollar is likely to hit tough resistance on any rallies to the 103.5 level.
The dollar found support at the 102.0 level on Monday and the dollar recovered back to 103.4 in New York on Monday. The dollar was unable to hold these gains and weakened back to 102.60 in early Europe on Tuesday as underlying dollar sentiment remained weak.
The US currency has been unsettled by further fears that there will be a diversification out of US dollars by Asian central banks, especially after rumours of Japanese action. This remains unlikely as the Japanese authorities have no interest in seeing a dollar plunge. There will also be speculation that the Japanese authorities will intervene to buy the US currency around the 102.0 level as part of a wide defence of the 100.0 level.
There will also be concerns that foreign bond holdings will be cut by Japanese investors given the recent capital losses. This would be a significant threat to the US currency.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."