Monday December 14, 2009 - 17:43:17 GMT
Share This Story
Forex Hound - www.forexhound.com
U.S. Dollar Trading Sideways-to-Lower
The U.S. Dollar is trading sideways-to-lower at the mid-session after backing off a two-month high versus a trade-weighted basket of currencies overnight. The news that Dubai received $10 billion in financing from Abu Dhabi to pay part of the debt held by the state-owned Dubai World is acting as the catalyst behind todayâ€™s weakness. This event is helping to alleviate one of the concerns which drove traders into the safety of the Dollar last week, the others being downgrades in Greece, Portugal and Spain. The overnight selling pressure is a sign that traders have become less averse to risk. This could help maintain a strong tone in higher risk assets today.
Another reason for the lackluster trade is the fear of stepping out in front of this weekâ€™s Federal Reserve Open Market Committee meeting on December 16th. Since its last meeting in November, the U.S. unemployment rate has dropped to 10% and retail sales have risen above expectations. Job losses and the lack of consumer spending are two key determinants studied by the Fed. Traders are looking for the Fed to look at these two reports and perhaps issue a more hawkish statement. A dovish statement will be a surprise which is not likely to bode well for the Dollar.
The EUR USD is up slightly after bouncing off a 50% price at 1.4594. The initial thrust in this market overnight was provided by the surprise news out of Abu Dhabi regarding its partial bailout of Dubai World. Gains have been muted, however, by the news that Euro Zone industrial production fell for the 18th month while employment extended its decline.
The GBP USD rebounded after a bout of early weakness this morning. The news out of Dubai did not helping the British Pound. British Pound traders have enough on their tables than to worry about sovereign debt issues in the Middle East. The U.K. has budget and debt issues of its own.
The USD JPY is receiving pressure from traders reversing their long positions initiated last week because of debt concerns in Dubai. The chart indicates the possibility of a pull-back of this currency pair into 50%/Gann angle support at 87.80 to 87.58.
The USD CHF is trading slightly lower in light trading. Resistance is being provided by last weekâ€™s high at 1.0367. Weakness is being indicated by this pairâ€™s failure to hold the old main top at 1.0337. This is usually a sign that conditions are overbought and that the last drive higher was most likely stop driven rather than fresh buying.
Demand for higher yielding assets is helping to boost the AUD USD and NZD USD. The news out of Dubai is helping to alleviate fears about holding higher risk assets.
Todayâ€™s turn around in the New Zealand Dollar is a sign that traders are ready to resume the strong up move triggered by last weekâ€™s surprise hawkish statement by the Reserve Bank of New Zealand.
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."