Monday August 17, 2009 - 13:04:36 GMT
Share This Story
Forex Hound - www.forexhound.com
Sustained Pressure on Equity Markets to Support U.S. Dollar
Risk aversion returned to the foreign currency markets overnight triggered by a sell-off in Asian equity markets. Early today, it was reported that Japanâ€™s economy grew in the second quarter, but the rate was less than expected. Although this news signaled the end of the recession, sellers still felt the need to liquidate long equity positions as the gain did not meet economistsâ€™ expectations.
The Chinese market led the sell-off as investors fled stocks for the safety of lower-yielding currencies such as the U.S. Dollar and Japanese Yen. The Japanese Yen is actually up versus the Dollar as investors repatriate funds removed from U.S. equity markets. Investment firms that borrowed Yen to fund the stock rally are now liquidating their equity positions and buying Yen to payback their loans.
The GBP USD also under pressure this morning. This is a combination of technical factors and the news overnight that U.K. home sellers lowered asking prices in August.
The British Pound is still feeling the negative effects of the recent decision to expand and extend its quantitative easing program.
The return of risk aversion is pressuring the EUR USD overnight. Traders are focusing on dumping higher risk assets and are ignoring last weekâ€™s positive news regarding the growth in the French and German economies.
Despite not experiencing the recession that affected every major economy and reports that the Reserve Bank of Australia will raise interest rates if the economy continues to grow, the AUD USD is under pressure this morning. Traders received the first clue on Friday that this market was preparing to break when the chart indicated a weekly closing price reversal top had been formed. This morningâ€™s weakness was triggered by a break in the Chinese equity markets and the confirmation of last weekâ€™s reversal top.
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."