New York Session – June 30, 2011 4:14 PM

June 30, 2011

The greenback was mostly weaker and the euro continued its ascent after Greece passed the implementation bill for austerity and rollover proposals were being considered. With the removal of near term risk factors relating to Greece and a surprisingly higher Chicago PMI print earlier, risk sentiment was buoyed as highlighted by a sell-off in the Swiss franc. USD/CHF spiked above 0.8450 but has since settled around current levels of around 0.8400 and EUR/CHF rallied to current levels of around 1.2195. Today also marked the end of the Fed’s $600B asset purchase program. Full text »

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Oil Prices Continue to Rise, Helped by a Lower U.S. Dollar

June 30, 2011

Greenback and oil prices

Last week, the U.S. tapped its strategic reserves, and the IEA released oil into the markets. The move temporarily sent oil prices lower, but they have been stubbornly higher recently.

Some of it has to do with speculation that demand could pick up. However, the lower U.S. dollar has something to with it as well. Oil prices and the dollar often move inversely to each other, and because oil prices are denominated in dollars, when the dollar falls, oil prices tend to rise.

With a weaker U.S. dollar expected in forex trading for a while, there will be little check higher oil prices — even as reserves are tapped. 

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Euro Looks for Weekly Gain in Forex Trading

June 30, 2011

Currency trading with EUR/USD

The euro is heading for a weekly gain in forex trading on the currency market. Unless something dramatic happens tomorrow, the euro will likely end on a much higher note, following a week-long rally.

Euro is getting plenty of support right now as the Greek austerity measures become finalized. Additionally, there is some hope that some sort of process for funding can be arranged for other euro zone countries dealing with possible financial failure.

Also helping the euro in forex trading is the fact that many expect the ECB to raise interest rates next week. Contrasted with the U.S. dollar, whose rate is likely to remain near 0% for a while, the euro looks like a good bet.  

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U.S. Dollar Forex Trading Forecast: More Weakness in the Near Term

June 30, 2011

Currency trading with the greenback

The U.S. dollar forex trading forecast, for the short term, is likely to see more weakness. Indeed, there are a number of factors likely to affect the greenback in currency trading during the near term. Action Forex offers 5 items undermining the U.S. dollar in forex trading:

  1. Concerns about the U.S. debt ceiling, and a downgrade of the sovereign debt rating.
  2. Rally of risk is pressuring the dollar as forex traders no longer feel the need for a safe haven.
  3. Possible rate hike from the ECB could further pressure the U.S. dollar as forex traders look for higher yields.
  4. The long holiday weekend in the U.S. could mean that assets flow elsewhere.
  5. Technical analysis currently favors the euro in forex trading.

And, of course, there are long term considerations as well. The U.S. dollar is vulnerable as scrutiny will turn from Greece after the austerity vote guarantees another bailout. Now, focus will be on the U.S. and its debt problems, and that means that the dollar will be under pressure in the future. 

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London Session – June 30, 2011 6:47 AM

June 30, 2011

ECB stays hawkish as Athens burns Full text »

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Asia Session – June 30, 2011 1:26 AM

June 30, 2011

Asia was the recipient of some healthy gains for the Euro as markets breathed a sigh of relief that the Greek austerity measures passed and the troubled nation was a step closer to a second bailout. After the New York session saw the Greek Parliament pass the new five year austerity package, the environment was ripe for the risk on atmosphere that was clearly present in Asia today. The EUR/USD was pushed through a stop loss minefield early on as it shot from 1.4440 to 1.4470 with a later run breeching an option related barrier at the 1.4500 big figure. The moves were similar across the majors as the AUD/USD added 80 pips to 1.0750 and the GBP/USD grew from 1.6050 to highs just over 1.6110 on the day. The NZD/USD also had a majestic day, reaching an all time post float high just over 0.8310. Moves were accelerated by reported risk buying by new Japanese toushins as well a general disdain for the US greenback. Full text »

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New York Session – June 29, 2011 4:03 PM

June 29, 2011

The U.S. dollar was broadly weaker against most majors with the exception of the Swiss franc following the Greek vote which resulted in a passing of the medium-term fiscal plan. The count was 155 to 138 in favor of supporting austerity and the euro experienced some volatility as the vote got underway. EUR/USD plunged sharply as a ruling PASOK party member voted against the plan; however the common currency rebounded as a member of the opposition voted yes. EUR/USD then climbed higher to current levels of around 1.4425. While the passing of the plan brings Greece one step closer to averting an imminent default and receiving the next tranche of aid from the EU-IMF, there is still a vote tomorrow regarding the implementation of the plan and long-term solvency remains a major concern. Full text »

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Euro Pulls Back Slightly, Regains Lost Ground

June 29, 2011

Profit taking after Greek austerity vote

The euro lost ground in forex trading, for a little while, as profit taking ensued after the Greek austerity vote. Now, though, with support from higher gold prices and general risk appetite, the euro is gaining in forex trading.

Indeed, the euro is higher as optimistic forex traders look for better gains. The U.S. dollar is down across the board, falling even to the Japanese yen. Risk appetite is higher, while at the same time concern about the U.S. is setting in.

With the current crisis overcome in the euro zone, focus is now shifting to the U.S. Concerns about a growing deficit are part of the picture. However, the most immediate concern for the global economy is the fact that if the U.S. doesn’t raise its debt ceiling, defaults on the trillions in debt might begin.

With that kind of concern about the greenback, it is no wonder the euro has the upper hand right now in currency trading

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Greek Austerity May Not Be the End of the Problems

June 29, 2011

Euro zone gets boost from Greek austerity vote

With the way open for another bailout for Greece, the euro zone is getting a boost. The euro is higher in forex trading on the currency market, helped by increased risk appetite.

Between the Greek austerity vote, better news out of the U.S. in terms of home sales, and expectations that China will help out, the euro is doing pretty well.

However, it is important to realize that this isn’t over yet. Even with the approval of the Greek government for austerity measures, the solution might not be found. There are still other countries in the euro zone that may face the some problems, and there has to be a way to continue supporting Greece, rather than all of these one-off packages that throw the region — and the world — into uncertainty for weeks at a time.

For now, though, crisis seems to be averted. The euro can gain while eyes turn to the U.S. and its debt ceiling and budget issues. 

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IMF Asks U.S. to Raise Its Debt Ceiling

June 29, 2011

Greenback lower today in currency trading

One of the issues that could weigh heavily on the U.S. dollar in currency trading on the FX market is the fact that the debt ceiling has been reached. For now, dollar weakness is due mostly to relief over the Greek austerity vote, and risk appetite.

Later, though, dollar weakness could come as a result of economic problems, and sovereign debt issues. If the U.S. debt ceiling isn’t extended again, defaults could begin, and that would be a real problem for the U.S. dollar — and China isn’t likely to ride to our rescue as it is for the euro zone.

In order to prevent another global financial crisis, the IMF has asked the U.S. to raise its debt ceiling. It will be interesting to see what is decided, and whether members of Congress can come to a budget agreement

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