Friday October 15, 2010 - 13:26:02 GMT
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U.S. Dollar Flat Overnight as Traders Await Economic Numbers
The U.S. Dollar was trading flat overnight as traders await
this morningâ€™s key economic numbers. Although todayâ€™s reports are not likely to
change the Fedâ€™s plan to implement quantitative easing, nervous long traders
may be waiting for any excuse to book profits following the recent run-ups.
Todayâ€™s numbers include the early CPI and Retail Sales
reports, followed by Michigan Sentiment and Business Inventories later in the
morning. All reports are expected to remain relatively close to last monthâ€™s
reports. Traders will, of course react the most to any surprises.
Most traders at this time expect the Fed to ease at some
time in the future. What market participants are trying to do now is assess how
the Fed will implement its new quantitative easing package. The sentiment seems
to be leaning toward a QE program which allows the Fed to dole out the stimulus
to areas where it is needed most. For example, based on economic reports, the
Fed may decide to focus on fighting inflation.
On Thursday, the Canadian Dollar reached par with the U.S.
Dollar. This isnâ€™t necessarily a big deal since it has been at this level
before. Long traders used the test of this psychological level as an excuse to
take profits, forming a closing price reversal top. Short-term traders should
look for follow-through to the downside to alleviate some of the overbought
pressure. As long as the fundamentals indicate a weaker Greenback, traders will
be looking for fresh buying opportunities on any break.
The Euro had an inside range overnight. This isnâ€™t
indicative of a change in trend however. Traders seem to be waiting for fresh
news to drive it higher. Watch for an intraday breakout over Thursdayâ€™s high at
1.4124. Generally speaking, a weekly close over 1.40 indicates that 1.45 is the
The Aussie Dollar is trading slightly lower but still in a
position to challenge parity. This market is set-up to close at its highest
weekly level since the 1980â€™s. The inside trade overnight indicates impending
volatility. Better economic news from China
continues to support this market, but it is going to take a strong U.S. stock
market rally today to send the Australian Dollar over 1.00.
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