Monday December 21, 2009 - 18:40:04 GMT
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Forex Hound - www.forexhound.com
Dollar Move Indicates Break from Risk Sentiment
This morningâ€™s recovery
in the U.S. Dollar could be a sign that risk sentiment may not be the
driving force behind price action much longer. Investors may begin to
use positive economic reports as a reason to buy the Dollar rather than
higher yielding assets.
The EUR USD is trading weaker at the
mid-session. The improving U.S. economy and lingering debt issues in
Greece, Portugal and Spain are likely to continue to pressure the Euro.
Longer-term charts indicate a move to 1.3800 is likely.
British Pound is trading lower. The chart indicates the next potential
downside target is 1.5980. Traders are repositioning ahead of
tomorrowâ€™s Final Third Quarter GDP report. Economistsâ€™ are guessing an
upward revision to -0.1% from an earlier guess of
figure will be a positive for the GBP USD and indicate that the U.K is
getting ready to return to growth during the 4th quarter.
Dollar is trading slightly better against the Yen. Declining demand for
lower yielding assets is helping to boost the Dollar. Carry-trade
action is also putting pressure on the currency as investors sell
Japanese Yen to buy stocks.
The USD CHF turned around shortly
after the New York opening. Traders should pay close attention to the
gold market. Weaker gold prices will weaken the Swiss Franc.
USD CAD is trading lower. This currency pair has been rangebound since
October. With both economies starting to show signs of improvement,
traders will be watching the reports to see which country develops a
solid trend or which one has the strongest numbers.
and the New Zealand Dollar are both under pressure. Although U.S.
equity markets are trading higher, demand for higher yielding assets
has been falling as traders reassess the Fed interest rate position.
Lower economic expectations are also pressuring the NZD USD and AUD
USD. Todayâ€™s lower markets suggest that risk sentiment may not be the
driving force behind these markets anymore.
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