Euro Gains in Forex Trading as China Denies Rumors of Bond Selling Plans
May 27, 2010
U.S. dollar drops in currency trading
The euro is gaining in forex trading today, thanks to news out of China. Yesterday, financial markets were thrown into turmoil as rumors surfaced that the Chinese were planning to sell European debt in order to limit their exposure. The euro took a tumble as a result.
However, today things are calming down as the Chinese deny those rumors. The relief is so great, that the U.S. stock market is on the rise, in spite of disappointing GDP data. And, as risk appetite returns, the euro gains in forex trading.
The U.S. dollar is heading lower as forex traders look for higher returns, and the euro finally rallies. However, the euro rally might be capped, since there are still concerns about the European debt situation. However, as long as the euro zone shows that it can handle itself, things should work out.
See Also
- Euro in Forex Trading
Currency trading on FX market
London Session – May 27, 2010 6:50 AM
May 27, 2010
The EUR/USD1.2150 area once again lent support to the EUR last night. Denials from the Chinese government that it is considering diversifying away from EUR assets pushed EUR/USD towards 1.2350, but the lack of follow through reflects the continued anxiety about the debt issues in the Eurozone. Sterling is performing well this morning following tough words from PM Cameron on the budget deficit with EUR/GBP pushing closer to the key 0.8400 support area. AUD/USD’s recovery is has taken it above 0.84000; though headline news regarding the watering down of the Australian mining tax has been partly undermined by the detail. Full text »
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Asia Session – May 27, 2010 1:47 AM
May 27, 2010
Continued uncertainty in the European Union was once again the culprit for the demise of the Euro in early Asian trading as a report stated that China was currently reviewing whether to cut back on European investments due to the debt crisis. This news brought the EUR/USD back to the doorstep of recent four year lows as it touched 1.2153 as the session got under way. The European currency also skirted a fresh 8 ½ year low against the Japanese yen, where the pair hit levels just under 109.20 to post lows not too far out of the ballpark from Tuesday’s 108.79 low which matched a price from late 2001. The good news for the battered Euro was that these lows represented the ground floor in Asia, and the monetary unit spent the rest of the session climbing higher. Full text »
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New York Session – May 26, 2010 5:44 PM
May 26, 2010
The overnight rally in risk assets turned around in NY after core US April durable goods orders posted an unexpected decline. The headline report beat expectations of 1.3% with a +2.9% increase, but excluding transportation, core durable goods orders fell -1.0% instead of gaining the expected +0.5%. Concerns over the ability of Spanish banks to fund themselves in the short-term credit markets (commercial paper) also weighed on risk sentiment and the Euro. EUR/USD had been trading above 1.2300 around the NY open, but slid lower throughout the day to finish just above recent lows at about 1.2170. USD/JPY also lost ground as JPY-crosses, or so-called carry trades, frequently used to bet on the direction of stock markets, were sold off as investor sentiment worsened. Overnight stock gains overseas and in US futures began to evaporate once floor trading started. The S&P 500 eventually gave up all the gains and finished down by about -0.6%. Full text »
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Australian Dollar Finds Support in Currency Trading
May 26, 2010
Aussie movies higher in forex trading
When the European debt crisis blew up, the Australian dollar lost a lot of ground in currency trading on the FX market. Forex traders became risk averse and began unwinding risky trades including the Aussie.
Now, though, the risk trade is picking up a bit. The Australian dollar is moving higher in currency trading as news arrives that the government might retreat from its unpopular resource tax.
Also helping matters is the economic data showing improved economic outlook for global economies, as well as the U.S. The euro, which would normally share in some of this good news, remains down as concerns about euro zone debt trump other hopes. But it looks as though the Aussie may recover in forex trading.
See Also
- Information for Forex Traders
Currency trading on the FX Market
Euro Continues to Lose Ground in Forex Trading
May 26, 2010
Euro forex trading forecast
The euro continues to lose ground in forex trading. Even though the OECD is reporting an improved forecast for economic growth in 2010 and 2011, the euro is not gaining. Concerns about European debt are still foremost, and that is hampering the euro.
While the forex trading forecast calls for difficult times ahead for the euro, it is not likely result in the death of euro. Parity with the U.S. dollar is probably not even in the euro forex trading forecast.
However, since ECB policymakers are reluctant to take steps to help the euro in the short-term, things aren’t likely to improve really soon. GFT’s Kathy Lien reports in FX360 on the disappointment felt by forex traders:
The market is disappointed that the ECB has not lowered rates or reinitiated Quantitative Easing. In the long term, additional stimulus is negative for the euro, but in the short term it could restore confidence in European policymakers.
See Also
- Euro in Forex Trading
Forex trading forecast
GFT’s Lien Says the `Euro Is Not Going to Die
May 26, 2010
Kathy Lien, director of currency research at online foreign-exchange trader GFT Forex, talks with Bloomberg’s Mark Crumpton, Dominic Chu and Lori Rothman about events
London Session – May 26, 2010 6:58 AM
May 26, 2010
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Asia Session – May 26, 2010 1:33 AM
May 26, 2010
Caution remained the theme once again in Asia as traders shunned the Euro and risk amidst continued fears that the regions banking system may be fragile. Comments from the FOMC’s Ben Bernanke didn’t help risk sentiment when he stated that the US would only be offering dollar swap lines to other central banks for a concise period of time. EUR/USD was unseated from its early 1.2385 perch to see lows near 1.2270, with about a big figure of wiggle room to the downside until new 4 year lows are retested. The song remains the same for the EUR/USD; with traders selling rallies every chance they get. Full text »
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New York Session – May 25, 2010 5:12 PM
May 25, 2010
The Euro bounced back from earlier losses as risk sentiment rebounded after better than expected US consumer sentiment suggested the US recovery was continuing to gain steam, supporting the global recovery outlook in the process. US May consumer confidence rose to a 25 month high of 63.3, well above forecasts of 58.5 and the prior 57.7 reading. Also, earlier reports that North Korea had puts its armed forces on alert were reported to be false, removing another negative that had weighed on global markets and sent the USD and US Treasuries soaring. EUR/USD based out above recent lows at around 1.2180 in early NY trade and then proceeded to recover higher on short-covering and finish out near 1.2345. JPY-crosses, which had slumped overnight on the reported N. Korean action and global stock market declines also rebounded sharply as risk was put back on. USD/JPY followed higher, trading from around 89.50 to end near a high around 90.30. Full text »
