U.S. Dollar Closes Week Higher Despite Volatile Euro
The U.S. Dollar finished the week higher despite volatile
trading action in the Euro. The Greenback closed decisively higher against the
Euro, Swiss Franc and Japanese Yen while ending up lower against the New
Zealand Dollar. The Dollar ended up almost flat versus the British Pound,
Australian Dollar and Canadian Dollar.
The U.S. Dollar opened the week trading higher against most
major currencies except the Japanese Yen as traders sought shelter in lower
yielding assets following the April 16th news that the SEC was charging Goldman
Sachs with defrauding investors.
The developing situation was wreaking havoc on
commodity-linked currencies since Goldman is a major player in this type of
market. Traders were also taking protection against the possibility that this
SEC investigation would involve other major investment banking firms. This is
also coming at a time when the U.S.
government is pushing hard for more financial firm restrictions. The U.K. and the
E.U. were also reportedly ordering their own investigations into Goldmanâ€™s
Additional pressure was coming from developing problems in Greece. Traders
started the week expecting Greece
to trigger the mechanism that would allow it to tap the recently approved
rescue package. The week before the spread between Greek Bonds and the German
Bund widened to over 400 basis points for the first time since the bailout plan
was approved. This indicated that traders were nervous and concerned about Greeceâ€™s
ability to survive. Others believed that the $61 billion bailout figure would
not be enough to ensure Greeceâ€™s
Taking a backseat to the Goldman news and Greece concerns
was the possible Yuan revaluation. Traders were pressuring commodity prices on
would allow the Yuan to appreciate in value. Many traders felt this move would
pressure the Dollar versus the Japanese while helping to boost the U.S. Dollar
against the New Zealand
and Australian Currencies.
Fear that the SECâ€™s investigation of Goldman Sachs would indicate
more financial regulation of U.S.
financial markets and a reworking of the rules for foreign banks helped to
pressure equities and commodities, giving the lower yielding Japanese Yen a
boost. Traders who had borrowed in Yen were being forced to sell higher
yielding assets to use the proceeds to pay back the loans. This triggered the
weakness in the USD JPY early in the week.
With the situation in Greece continuing to unravel and
the traders still sorting out the details of the Goldman law suit and its
impact on the markets, traders were looking for the Dollar to be a big winner this
week against most majors with the exception of the Japanese Yen. Traders seemed
to be expecting both problems to escalate before they get better.
On Tuesday, although it was reported that German investor
confidence improved more than forecast this month, the lingering Greece issue
was expected to shift investor sentiment especially if it was combined with a
slowdown in the Euro Zone recovery. Greek borrowing costs were increasing,
having more than doubled at the sale of 13-week bills. This prompted Bundesbank
President Axel Weber to say that Greece may need more assistance.
At this time, investors seemed to be looking for a short-term
fix to a long-term problem. Hedge funds continued to press the Euro lower
figuring that another call for financial aid from the European Union would
begin to erode confidence in the Euroâ€™s ability to survive. All of this news
indicated that traders should continue to look to sell rallies while
maintaining a bearish bias for the Euro.
By Wednesday the EUR USD continued to get pounded. Overnight
the Greek 10-year Bond/German Bund Spread hit a new 12-month high at 492 basis
points. Investors were asking for protection from a potential collapse in the
Greek debt market. Greece
was also beginning to implement some of its newly proposed austere financial
measures designed to tighten up debt and improve its cash flow. Facing a huge
rise in the cost to service its debt, Greece scheduled a meeting with
certain European Union officials and the International Monetary Fund to discuss
the terms of the recent bailout proposal.
Talk was circulating that the recent bailout plan was
underfunded. Hedge funds continued to short the Euro in anticipation of more
borrowing by Greece
and another proposal from the EU/IMF to provide additional emergency funds if
The week-ended with Greece finally succumbing to
pressure while asking the EU/IMF for help. This news triggered a short-covering
rally in the Euro. The action was volatile, but the move did nothing to change
the sentiment or the trend.
The week long surge in borrowing costs finally forced Greece to
formally ask to tap the 45 billion Euro ($60 billion) rescue package provided
by the European Union and the International Monetary Fund.
The unprecedented move by Greece threatens both the Euroâ€™s
stability and the structure of the European Union. Traders are now asking if Greece gets the money then what about Spain, Portugal
and Ireland.Many feel that these three countries are next
in line for a rescue as debt problems spread across Europe.
Based on current developments, the very existence of the Euro is now being
When the Euro was created a little over 11 years ago, the
founding fathers gave the European Central Bank the power to control interest
rates and fiscal responsibility to the individual countries. The current crisis
has threatened the cohesion of the European Union as many member countries have
turned their back on the sovereign debt problems of struggling member nations.
These â€śsolventâ€ť nations are going to have to be convinced that the Euro is
worth saving by ponying up the funds necessary to save the economies of the
struggling members or risk debt default and the collapse of the Euro.
With the cost to service its debt sky-rocketing everyday,
Greek Prime Minister George Papandreou had no choice but to ask for the money.
After reaching unsustainable levels that were destroying the efforts by the
Greek government to cut its budget deficit, Greece had to cave in and make the
request for bailout funding. As of last night, the cost to finance 5-year Greek
credit default swaps soared to 623 basis points before settling at 590 bp after
the rumors of the activation of the rescue plan began to circulate.
Although the Euro rallied in a short-covering rally as news
broke of the bailout, investors still have to be pessimistic about the
viability of the Euro. The main concern at this time is the inability of the
European Union to come up with concrete rules regarding the terms of the
bailout loans. Prior to the bailout proposal put together in haste earlier in
the month, the EU had no such plan. In looking-back, it looks as if that plan
was not designed to strengthen the Euro, but to stem the pace of its decline.
Now that Plan A has failed, the prospects for Plan B do not
look that much better as EU members appear to be making up this plan as they go
along. The trick is going to be trying to convince the solvent EU members that Greece
is worth saving. Furthermore, the EU member are most likely going to have to
consider putting together a plan which also provides aid for Spain, Portugal
and Ireland or any other nation that will need aid. The second part of the
equation may be considering booting all of these struggling nations out of the
club since it has already been proven that despite austere measures to shore up
the budget, the capital markets are really controlling the show.
Traders and investors want clarity at this point. They want
to have a fully understandable mechanism plan in place as soon as possible to
prevent the collapse of the Euro. If history gives us any clues, however, the
EU will drag its feet and fail to live up to its responsibility as a partner. Germany especially will be the biggest hurdle
and the other sovereign nations to overcome. Not only are the Germans against
any kind of bailout plan, but the Greek citizens feel that a bailout will make
them appear weak to the global community. This means that eventually the next
bailout plan will fall squarely in the hands of the International Monetary
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
Forex News 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."
Actionable trading levels delivered to YOUR charts in real-time.
Tue 17 July 2018 AA 08:30 GB- Employment A 13:15 US- Industrial Production AA 14:00 US-Powell Testimony Wed 18 July 2018 AA 08:30 GB- CPI A 12:30 US- Housing Starts/Permits AA 14:00 US-Powell Testimony Thu 19 July 2018 AA 1:30 AU- Employment AA 08:30 GB- Retail Sales A 14:30 US- EIA Crude A 12:30 US- Weekly Jobless Fri 20 Jun 2018 A 12:30 CA- CPI/Retail Sales
John M. Bland, MBA co-founding Partner, Global-View.com
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.