Asia Session – December 29, 2010 1:33 AM

With the lack of any data or driving news the currency markets seemed content to take a break today in Asia. With the New York trade session once again seeing the significant moves, Asian trading witnessed jumpy markets that remained just off of dollar highs. EUR/USD dipped under 1.3090 briefly but support pushed the pair back through 1.3120 where it spent a good majority of the day in sideways trading. With many funds and traders out until the New Year, the market moves were exaggerated in very thinned conditions that could easily promote volatility. GBP/USD pulled off of lows to see 50 pip gains to 1.5400 and the AUD/USD did the same, reaching 1.0115 on an orderly 20 pip rise. Full text »

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New York Session – December 28, 2010 4:02 PM

The dollar reversed earlier losses against most major currencies and the Swiss franc surged to new record levels amid year-end thin liquidity and disappointing U.S. economic data. USD/CHF fell to record lows of around 0.9435 and GBP/CHF dropped to all time lows of nearly 1.4560 on the back of a stronger franc. EUR/USD plummeted to current levels around 1.3110 after trading as high as around 1.3275 on a stop-driven spike over night. Full text »

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U.S. Dollar Drifts Lower in Forex Trading

Uncertainty and thin trading keep greenback rangebound in currency trading

The U.S. dollar is drifting lower in forex trading on the currency market. Greenback is moving lower as forex traders consider their next moves. Uncertainty about what recent economic data means for the data has many pausing.

Reasonably good economic data has been indicating that the U.S. economy is recovering (although slowly). Forex traders are trying to decide whether this means that there should be more support for the U.S. dollar, or whether, instead, the improving sentiment will mean a better situation for risk currencies.

For now, the euro has been able to hang on in forex trading, and the U.S. dollar remains rather weak.

See Also

• U.S. Dollar in Forex Trading
  Currency market trends for forex traders

Trading Block

Insight on the markets, economy and commodities, with Boris Schlossberg, GFT Forex.

London Session – December 28, 2010 8:02 AM

The dollar weakened as market liquidity remains thin with the UK on holiday and the northeast US still struggling with the aftermath of the blizzard. EUR/USD climbed to session highs of nearly 1.3275 on a stop-driven move and USD/JPY tumbled below 82.00. The Swiss franc strengthened to record levels against the greenback and the pound as USD/CHF and GBP/CHF fell to record lows of around 0.9435 and 1.4560 respectively. Full text »

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Asia Session – December 28, 2010 1:10 AM

With markets still thinned by a combination of holidays and a crippling blizzard in the North East of the US, the Euro enjoyed a stop driven move that topped 1.3250 on the back of a weaker dollar. Earlier in the US, a firmer two year treasury auction pushed yields lower, thus setting the stage for the potential of a weaker dollar. The EUR/USD saw a flurry of stop loss activity near 1.3220 on its way to eventual highs near 1.3255. The dollar retreated across the board in Asia, but it remains to be seen if the move has staying power or is just due to thinned markets and short covering. Full text »

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New York Session – December 27, 2010 4:03 PM

It was a lackluster session as most traders were on holiday and as New York was hit by a blizzard. Ranges were narrow in a quiet trading session and there was a lack of information to drive price action. The dollar softened and the euro firmed somewhat with EUR/USD trading as high as nearly 1.3170 and has since settled around 1.3150. The only data of note was the Dallas Fed manufacturing activity index for December which came in weaker than the anticipated 17.0 with a print of 12.8 from the prior 16.2. Full text »

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U.S. Dollar Down Against the Yen in Currency Trading

Chinese interest rate hike prompts safe haven interest

The U.S. dollar is lower in currency trading on the FX market against the Japanese yen. A lot of that has to do with the fact that China has hiked interest rates again.

With China hiking interest rates there are concerns about economic recovery, as Chinese officials attempt to slow growth. A flight to safety is being contemplated by many forex traders.

Once again the Japanese are in a position to worry about yen appreciation, since a stronger currency makes exports more expensive and Japan’s economy relies a great deal of exports.

See Also

• Japanese Yen in Forex Trading
  Currency trading news for forex traders

London Session – December 27, 2010 8:10 AM

The People’s Bank of China raised benchmark interest rates on Saturday by 25 basis points in its second move since October. The one-year lending rate was increased to 5.81% while the deposit rate rose to 2.75%. With the last reported inflation rate for November at 5.1% this means that there are still negative real interest rates, though the bank is taking gradual steps towards normalization. The initial reaction in the currency markets was a softening of commodity-linked currencies and strengthening of the perceived safe haven currencies as markets took on a more risk averse tone. AUD/USD dipped below parity but has since recovered as investors viewed the decline as long opportunities. Though the timing of the rate hikes may have come as a surprise, many analysts were anticipating China to move higher with interest rates and are expected to continue to do so. The gradual nature of the increases, as we have seen, may result in periodic setbacks in risk sentiment with only a marginal impact to Chinese growth creating potential buy on dips opportunities. Full text »

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Asia Session – December 27, 2010 2:41 AM

The post holiday week opened with the news that China had hiked rates by 0.25% in order to help stem inflation, pulling risk lower in early trading. Although the move has been anticipated for weeks, the Christmas hike to 5.81% by the Peoples Bank of China elicited  traders to sell risk, helping to drop trade partner Australia’s currency prior to the open. The AUD/USD opened over 40 pips lower to a sub 1.0000 level, but risk eventually regained its footing to show sound gains for the day. Full text »

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