U.S. Dollar Drops in Currency Trading
October 30, 2008
Euro continues its correction upward in forex tradingThe U.S. dollar is dropping this morning in currency trading on the FX market. After yesterday’s Fed rate cut, the euro solidified its upward correction in forex trading.
Another factor affecting the greenback in FX trading is the fact that 3rd quarter GDP is showing a contraction. The economy has definitely slowed, and this is being taken as proof positive of a U.S. recession.
See Also
- More on the Euro in Forex Trading
FX trading with the euro - Greenback and FX Trading
Currency trading on the FX market
London Session – October 30, 2008 8:04 AM
October 30, 2008
The buck caught a bid in London trading and recovered some of the overnight losses. The flight to risk assets continued as European marts followed Asia’s performance with a 3% gain thus far. This has the flight from safe assets such as the USD in full effect. EUR/USD gave back some of the stellar gains and slipped about -80 pips to 1.3090/95 ahead of the NY open. This was likely the result of Euro-zone consumer confidence slipping to a 14-year low -24 in October from -19 prior. GBP/USD gave back a modest -30 pips towards the 1.6545/55 area as a report showed home prices slipped by less than expected -1.4% in October. Full text »
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GFT Daily Market Commentary
October 30, 2008
Forex Market Commentary for October 30, 2008 by Cornelius Luca
GFT Daily Market Commentary
An early rally in the US indices and ongoing profit taking in FX triggered another massive slide on the dollar against the European and the commodity currencies, and a dollar/yen rally. Once the Fed met the market expectations and cut rates by 50 bps to 1%, stocks fell. The pattern seen during the past two days is in its final stages, so today the market should be even choppier than usual.
Euro/dollar
The euro/dollar rallied further after forming a bullish reversal a day earlier and my model remains long. The 20-day moving average held the upside, and only a clear break above it would turn the outlook positive. Until then, the medium-term bias remains bearish.
Above 1.3200, resistance is now seen at 1.3260. Distant resistance is at 1.3570 would signal a sustained recovery of euro/dollar.
Immediate support is at 1.3060. The next level is 1.2907. Below 1.2695, distant support is now at 1.2335.
Oscillators are bullish.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/yen
Dollar/yen rallied to a one-week high early Tuesday but then reversed gains, as the 20-day moving average held. My model remains long, but the medium-term outlook remains bearish. I wouldn’t be too long here.
Immediate resistance is at 98.45. The next level is 99.70. Above 100.50, resistance is now seen at 103.05.
Initial support remains at 96.75. The next level is 95.70. Below 94.40 there is Friday’s low of 90.94.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bearish
LONG-TERM: Mixed
Sterling/dollar
Sterling/dollar surged further on Wednesday and my model remains long. The upside is limited, as the medium-term outlook remains bearish.
Initial resistance is at 1.6635. The next level is 1.6760. Distant resistance looms at 1.6940.
Immediate support is at 1.6365. The next level is at 1.6090. Below 1.5735, distant support is at 1.5270 from a pivot low.
Oscillators are rising.
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Dollar/Swiss franc
Dollar/Swiss caught up with the other the European currencies and collapsed on Wednesday. In the short term the downside is favored, but the medium-term risk remains on the upside.
Immediate support is at 1.1260. The next level is 1.1180. Distant support comes at 1.1055.
Initial resistance is at 1.1400. Above 1.1500, the next level is 1.1767. This is followed by the area between 1.1867 and 1.1873.
Oscillators are mixed.
NEAR-TERM: Mixed
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
Asia Session – October 30, 2008 1:55 AM
October 30, 2008
This session in Asia saw the Yen fall against the US Dollar and the Euro as the Nikkei surged up almost 9% and the Fed opened up swap lines to various emerging countries in need of Dollars. It is said that there was at least billion available in these lines. All Asian equity markets were surging after the lunch break. With the possibility of a .25% rate cut by the BoJ tomorrow looming, many looked to take profit on the Yen, and the USD/JPY pair took off in Asia from a low of 97.22 near the open, to pop up to a high of 99.11 before reversing again to levels near 98.30. The EUR/JPY pair was back in favor as risk aversion was nowhere to be found, and buyer pushed the pair from near 125.80 to highs a few pips above 131.00. This was a big move even in light of recent market moves. All other Yen crosses followed the move, all making gains of at least two big figures. Full text »
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New York Session – October 29, 2008 5:00 PM
October 29, 2008
The buck was sold some more in the NY session as the Fed did not disappoint and slashed rates -50 bps. In the press release the Fed left the door wide open for further rate cuts down the road, noting significant downside risks to US economic growth. Futures traders promptly went ahead and priced in 42% odds of another -50 bps cut at the December meeting. This was a mere 18% probability just yesterday. Full text »
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Fed Rate Decision Focus for Today
October 29, 2008
Currency market awaits Fed rate decisionsThe currency market and other markets are waiting for the Fed rate decision, expected to be announced later today.
Things have been a bit languid this morning in forex trading, although there have been some pockets of activity. But most of it has been somewhat smooth activity.
The Fed rate decision is expected to bring the funds rate down to 1%, a cut of 50 basis points. Even if the rate cut is not that steep, it is still expected to be a cut of at least 25 basis points.
See Also
- Forex Trading on the Currency Market
Trade more than 160 world currency pairs
U.K. Pound Forex Trading Forecast
October 29, 2008
Currency trading with the sterlingThe U.K. pound forex trading forecast is showing a currency headed for a big gain against the U.S. dollar. In currency trading, the sterling is headed for the largest gain its had against the greenback in more than a decade and a half.
Much of the strength the sterling is seeing in FX trading is coming with support from a global stock market rally, reports Bloomberg:
Additionally, the British government is vowing to help the country through its recession.
See Also
- U.K. Pound in Forex Trading
World currencies in FX trading
Japanese Yen Strengthens in Currency Trading
October 29, 2008
Yen begins recovery after yesterday’s plungeYesterday, the Japanese yen plunged dramatically in currency trading on the FX market. Today, the yen begins a recovery in FX trading.
The Japanese yen is gaining against the U.S. dollar in currency trading on the FX market as an interest rate decision is expected from the Federal Reserve.
The Fed is expected to cut interest rates another 50 basis points to 1% in the hopes that it will stimulate the U.S. economy. This is likely to bring hope for the U.S. dollar, but the Japanese yen will probably still remain strong against the U.S. currency.
See Also
- Japanese Yen in FX Trading
Currency trading on the FX market
Euro Begins Correction in Forex Trading
October 29, 2008
Currency trading with the euroThis morning, the euro has begun a correction in forex trading on the currency market. With the 15-nation currency oversold in trading, it is little surprise that the euro is beginning to make some headway.
However, even though the euro has moved beyond support and is targeting the 1.3005/58 area, one does not how long this brief rally will last.
It does to be helped, though, by a current trend to return to risk appetite after yesterday’s global stock rally and today’s expected Fed rate cut. These factors are supposed to be making things less volatile and signaling a recovering U.S. economy.
See Also
- Currency Trading with the Euro
Forex trading on the currency market
London Session – October 29, 2008 8:06 AM
October 29, 2008
The buck lost some ground against the majors in London as the markets await the FOMC rate decision in the NY afternoon. The consensus is still for a -50 bps cut to 1.00% but the futures market has priced in 42% odds of a steeper -75 bps cut. EUR/USD added 45 pips and was sitting near the 1.2990 area on the risk of more aggressive cuts. USD/CAD shed -220 pips towards the 1.2580 area helped by a overnight rally in oil to just above /bbl. Full text »
