Tuesday October 11, 2005 - 05:37:46 GMT
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Tricom Futures and Foreign Exchange -
Forex: The Germans finally have a leader - looking for the market to now Buy the Fact, after earlier selling the rumour.
The dollar was top-heavy against other major currencies owing to concerns over the credit risk at US corporations. Concerns over the credit risk in the US increased after the announcement by auto parts company Delphi Corp that it had asked for bankruptcy protection.
While the dollar turned top-heavy today, it is expected to maintain a firm undertone, widening interest rate differentials will continue to be the driving force of the dollar both against the yen and the euro.
The dollar is also expected to see some support from doubts over whether Germany's new coalition government can deliver economic reforms, and from the easing of the New York subway terror alert.
Finally, the Germans have worked out the political mess which has continued for nearly a month, and now we can look for the EUR to recover some of its lost ground. Most of the overnight USD strength came after London lunch, and going into the early US session. Given that the US was closed, volume was light, and much of the move would have been caused by stop-loss orders being triggered around 1.2075 in EUR/USD and 1.2825 in USD/CHF.
I don't know that the weakness in the EUR/USD is going to conintue much further below 1.2000-1.1980 this time around.
Today’s Economic Releases:
UK: Foreign Tade
US: FOMC Minutes
Today's Top Trades
. Buy USD/JPY around 113.65-70
For more ideas send me an email, [email protected]
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