December 29, 2008
Israeli strokes on Gaza contribute to a weaker greenback in currency tradingThe U.S. dollar is weakening in forex trading on the currency market this morning. The major even that is contributing to U.S. dollar weakness is the fact that Israel started attacks on Gaza over the weekend.
Worries about oil delivery out of the Middle East are sending oil prices higher — and the greenback lower in currency trading.
Another factor affecting the U.S. dollar in forex trading is the fact that economic factors continue to show weakness. Retail sales are especially damning right now, as they show consumer spending down, and the government is hoping to stimulate the economy with higher consumer spending.
This week is likely to be relatively quiet in currency trading (the week between Christmas and New Year often is). However, it is a good idea to look to further clues about dollar weakness tomorrow with the release of Consumer Confidence data and Wednesday’s release of jobless information.
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December 26, 2008
Loonie down in forex tradingThe Canadian dollar continues to struggle in FX trading on the currency market this morning. Like other currencies, though, the loonie remains mostly rangebound in forex trading today, consolidating.
However, economic conditions have been weighing heavily on the Canadian dollar recently, and that is leading to lower performance. Financial markets in Canada are closed today for Boxing Day.
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December 26, 2008
Slowing inflation sends yen lower in currency tradingThere has been some concern in recent weeks about whether or not the Japanese government is willing to directly intervene in the FX market in order to force the yen to depreciate.
Now, however, it appears that economic forces may do that work for the Japanese government. Inflation is slowing in Japan, and the easing that the Bank of Japan had done with monetary policy seems to be working. Bloomberg reports on how things are settling down in currency trading:
“Panicked buying of the yen has come to an end,” said
Mitsuru Sahara, senior currency sales manager at Bank of Tokyo- Mitsubishi UFJ Ltd., a unit of Japan’s biggest lender by assets. “The BOJ has done what it can do in response to a global downturn and has effectively adopted a quantitative-easing policy.”
It is possible, though, that recent volatility could return again to the FX market, and that could spur more yen buying on panic, rendering efforts by the Bank of Japan useless.
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December 26, 2008
Currency trading with the greenbackThe U.S. dollar is mixed in forex trading on the currency market today as year-end consolidation sets in and post-holiday trading remains somewhat thin.
Stability is the name of the game in currency trading today, and the greenback is no exception. The only place that economic data is being released today is Japan, so technical analysis is most commonly being used right now.
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December 26, 2008
Political pressure likely to prevent Japanese yen depreciationFor a few weeks now, the Japanese have been fretting about how quickly the yen has been rising in forex trading on the currency market. The yen has been appreciating against every other major currency as risk appetite declines and the carry trade unwinds.
Indeed, current conditions make it desirable for the Japanese government to intervene in the currency market and contribute to a depreciating yen:
- Japan’s economy is slowing.
- Japan has entered its first monthly trade deficit in nearly 20 years.
- Japanese exports are more expensive — making them less desirable.
- Corporate profits are shrinking due to forex conversion losses.
Forex Blog points out, however, that Japan is likely to stay out of it for political reasons.
The U.S. is likely to frown on Japanese intervention in the currency market
In all likelihood, the U.S. would like to see the Japanese yen continue to appreciate. It makes exports more expensive from Japan, and could help the U.S. become more desirable as a trading partner — especially in terms of auto exports.
With political pressure from Europe and the U.S. for Japan to let the currency issues with the economy and the currency market work themselves out, it is likely (but by no means certain) that the Japanese government will eschew intervention in the currency market — for now at least.
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December 25, 2008
Wishing you a Merry Christmas
GFT Forex would like to wish you a very
Merry Christmas!
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December 25, 2008
U.S. economic fundamentals weigh on greenbackEven though there is hope that the U.S. dollar will gain against the euro in forex trading, there are some doubts when one looks at the economic fundamentals — at least short-term.
Right now, the news that the GDP is sinking does not bode well for the U.S. dollar against the euro in forex trading. GDP is a major economic indicator, tracking all aspects of the economy and presenting them in a very succinct way.
With GDP showing slowing, this could be just the chance for the euro in forex trading, taking advantage of current U.S. dollar weakness.
Of course, it is possible that things will turn around. The long-term U.S. dollar forex trading forecast includes the hope that economic stimulus will turn things around for the U.S. economy — and for the U.S. dollar.
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December 25, 2008
Loonie looking for direction in currency tradingThe Canadian dollar is rangebound right now against the U.S. dollar in forex trading. The loonie is awaiting direction in currency trading ahead of the Christmas holiday.
Two factors that are likely to contribute to the Canadian dollar performance on the FX market include:
- Commodity prices.
- U.S. economic data.
Commodities are important to the Canadian economy, and U.S. economic data will provide some insight into how Canada fares against the U.S.
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December 25, 2008
Some of the currency market stories todayRight now, the biggest forex news is that risk appetite is out. Hardly anyone wants to take a risk today, ahead of the Christmas holiday. As a result, consolidation is the name of the game today. Here are some other quick tidbits of what is happening on the currency market today:
- Yen is gaining against the U.S. dollar as falling equities make the yen attractive as a safe haven.
- U.S. dollar dropping against euro in forex trading as economic data in the U.S. continues to show weakness.
- Euro approaching parity with the U.K. pound as sterling feels the pressure from a worsening economy.
- Russian ruble is devalued again as the financial situation in Russia continues to deteriorate.
- Swap deals with Japan, China and the U.S. help the South Korean won make some gains in currency trading.
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December 25, 2008
In thin trading, euro looks to trade one-to-one with sterlingTrading is thin today ahead of the Christmas holiday. However, with the fundamentals still in place, some movement is being made. The British economy is still weighing rather heavily on the sterling in currency trading, and this is providing an advantage to the euro.
In fact, many are watching as the euro heads toward parity with the U.K. pound in forex trading. Since the combined currency was first established, the sterling has remained solidly ahead on the FX market. Now, though, the euro is catching up, promising to reach a one-to-one value if the British economy continues on its present course.
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