Friday October 15, 2010 - 19:38:16 GMT
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Forex Hound - www.forexhound.com
U.S. Dollar Erases Losses as Treasury Delays China Currency Report
The U.S. Dollar erased earlier losses after
Federal Reserve Chairman Bernanke hinted at more quantitative easing but failed
to lay out a roadmap of the Fedâ€™s plan. In addition, the Treasury Department
cancelled a report which was supposed to name China as a currency manipulator.
Traders had been selling the Greenback at
will this week in anticipation of the Fedâ€™s new quantitative easing program.
While it is given the Fed will implement this plan shortly after its next
meeting on November 2 & 3, traders still want to know how much they are
going to commit to the economy and how they are going to do it. Bernanke could
not provide the details that traders wanted to hear and short Dollar traders
used this as an excuse to take profits.
Rumors that the Treasury Dept. was going to
postpone a report calling China
a currency manipulator may have also helped boost the Dollar. The rumors may
have triggered a sharp break in the Treasury market, driving up interest rates.
Traders are worried that China
may retaliate against the U.S.
by selling the Treasury Bonds it currently holds as investment.
One of the hardest hit currencies was the
Euro. Technically, the EUR USD is in a position to post a daily closing price
reversal top. This pattern could trigger a 2 to 3 day break.
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