New York Session – November 30, 2009 4:33 PM

November 30, 2009

News regarding the Dubai World debt debacle continued to dictate the price action in NY trading. While the tone early in the session was one of uncertainty as to whether the state-run bank would be bailed out, the tide changed in the closing hours. Headlines that the beleaguered bank will be restructuring billion in debt gave the bulls something to cheer about and the beaten down risk trade was once again back in vogue. US equities managed to close the day about 0.4% higher after being down more than -0.5% early on. Full text » | Technorati | Stumble It!

U.S. Dollar Forex Trading Forecast

November 30, 2009

Dollar weakness expected going forward

While the U.S. dollar is consolidating today in the wake of the Dubai debt concerns from the end of last week, there is an expectation that the fundamentals will undermine dollar strength going forward.

The risk trade saw a brief return in earlier trading, but things appear to be changing course — at least for now. The dollar is consolidating. However, as Kathy Lien reports on FX360, dollar weakness is expected in the forex trading forecast:

Although we believe that an all out default of Dubai’s sovereign debt is not an immediate risk and the situation is not nearly as grave as some people make it out to be, it is still unfolding. Fundamentals still support further dollar weakness but we caution traders against taking large positions.

Things are likely to be volatile for a while, so the U.S. dollar will probably fluctuate between gains and losses frequently.

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Euro Back Above $1.50, But Paring Gains

November 30, 2009

Euro in forex trading

The euro is paring its recent gains against the U.S. dollar in currency trading on the FX market this morning. Overnight, the euro gained in forex trading as news about Dubai turned out not to be such a huge deal as originally thought.

However, things are not moving back into true risk appetite. Indeed, forex traders are backing away from the risk trade that they had begun embracing earlier. For now, the euro is lower against the U.S. dollar in currency trading as the greenback consolidates its gains from the end of last week.

It will be interesting to see how things unfold going forward. Dollar weakness is ultimately expected against the euro in forex trading, but that could be some ways off as forex traders warily re-enter the risk trade.

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London Session – November 30, 2009 6:54 AM

November 30, 2009

The reassurances from the UAE’s central bank that it “stands behind” local and foreign banks in the face of a possible default from Dubai World eased risk aversion last night and chased Asian stock markets higher.  Anxiety has remained obvious in Europe, however.  European stock markets erased early gains and EUR/USD has edged lower from an overnight high at USD1.5083.  EUR/JPY and USD/JPY has posted lows of 127.06 and 84.91 respectively in early London hours following a report in a Japanese newspaper that Finance Minsiter Fujiii had said the Gov’t will not intervene to weaken the JPY.   In contrast, the JPY was sold sharply during London hours as Japanese Strategy Minister Kan stated that the Government agrees to measures to stop the yen rising.   The recovery in USD/JPY was short-lived.  The apparent rift between the MoF and the BoJ on how to approach the issue of deflation in the Japanese economy combined with the very low level of USD rates have both contributed to scepticism on the risk of intervention in USD/JPY.  That said, BoJ Governor Shirakawa and PM Hatoyama are scheduled to meet later this week and this will keep the market nervous about the prospect of action on the JPY. Full text » | Technorati | Stumble It!

Asia Session – November 30, 2009 1:50 AM

November 30, 2009

Dollar and Yen gains from late last week that were due to the possibility of Dubai defaulting on up to 80 billion in loans were chopped down today as traders felt more confident that the issue was under control. The first minutes of the week were an indication of the volatility and indecision to come as some yen based pairs spanned up to 90 pips within the first moments of trading. Comments out of the United Arab Emirates Central Bank helped to sooth fears as they stated that they stood behind Dubai as they offered assistance in the form of easing credit. The moves were seen as reassuring to investors, and thus traders looked to take the other side of many of the fear based moves from late last week. Full text » | Technorati | Stumble It!

London Session – November 27, 2009 6:18 AM

November 27, 2009

The market is taking a breather.  Volatility had soared in early hours after the risk trade headed for the exits in thinned liquidity.  It is likely to take at least a few days before the implications of the impact of a possible default from Dubai are properly digested but for the present it seems that the market is seeing this negative news as a blow to the global recovery but not one that will push it off course.  Full text » | Technorati | Stumble It!

U.S. Dollar Rallies on Dubai Debacle

November 27, 2009

Greenback surges in forex trading

The U.S. dollar is rallying right now in currency trading on the FX market as the news out of Dubai sends all thoughts of risk out the heads of investors. Investors had been hoping for a good day today on Wall Street, but optimism over the biggest shopping day of the year, Black Friday, has been completely overshadowed by the Dubai debt crisis.

Dubai World Conglomerate plans to ask its creditors to allow it to stop making payments for six months while it restructures. This news is a huge blow, since Dubai has represented a great deal of global economic activity. This is an especially hard blow for emerging markets.

As a result, the greenback in surging in forex trading as investors look for a safe haven. Forex traders are in no mood for risk today, and are showing it. The risk trade has been completely abandoned for now, as traders look for capital preservation in the safety of the world’s most stable and reliable currency. 

The dollar’s strength also has commodities falling, as downward pressure is applied to oil and gold, both of which often move inversely to the greenback in forex trading. It will be an interesting day today, and it remains to be seen whether the weekend, with its closing of the markets, will give forex traders a chance to evaluate their response, and see whether the U.S. dollar is able to maintain gains in currency trading next week.

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Happy Thanksgiving from GFT Forex Blog!

November 26, 2009

Enjoy your holiday

Hopefully, this year has provided you much to be thankful for in terms of your currency trading. 

May the coming holidays provide you with interesting opportunities.

Happy Thanksgiving

from the GFT Forex Blog!

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London Session – November 26, 2009 6:01 AM

November 26, 2009

Fear of sovereign default in the Middle East rattled the markets this morning following yesterday’s news that the state controlled Dubai World announced it intended to ask all bondholders for a postponement of repayments until May.  Stocks markets sank across Asia and the Europe.  Following sharp moves for the USD during Asian hours there is evidence of paring back of risk on some fx crosses this morning, though on the view that the US authorities are unconcerned  about USD weakness EUR/USD remains above the 1.5000 level, USD/JPY remains below 87.20 and USD/CHF is holding close to parity.  Full text » | Technorati | Stumble It!

Asia Session – November 26, 2009 1:48 AM

November 26, 2009

What should have been a quiet day in Asia due to the US Thanksgiving Holiday was anything but, as currencies put on a volatile show, the likes that have not been seen in weeks. The markets were thin, the moves were fierce, and the dollar was victimized by the Yen and Swiss franc. Full text » | Technorati | Stumble It!

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