U.S. Dollar Down Across the Board as Markets Celebrate Eurozone Deal
October 27, 2011
Greenback weakens in forex trading
The U.S. dollar is down across the board (after showing strength yesterday) as financial markets celebrate the eurozone deal announced earlier. The deal involves private bondholders taking a great deal of the burden for the Greek bailout, and is being hailed as a solution to immediate problems.
Already, there are some murmurings about the long-term viability of the Greek bailout plan, but for now financial markets are wildly exuberant and risk appetite is high. As a result, the U.S. dollar is down quite a bit against the euro, as well as the pound and the Canadian dollar (which has strengthened beyond parity).
Also adding to the risk party is the fact that much of the U.S. 3rd quarter GDP growth was due to consumer spending. Hopes for the U.S. economy, along with enthusiasm about Europe, are spurring high beta currencies to highs not seen in weeks — or even months — against the U.S. dollar.
See Also
- Economic News and the U.S. Dollar
U.S. dollar in forex trading
Азиатская Сессия – October 27, 2011 6:15 AM
October 27, 2011
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Asia Session – October 27, 2011 2:15 AM
October 27, 2011
The EUR/USD was clearly the winner in Asia today as the currency basked in the bids that appeared once announcements were made at the conclusion of the 11th hour European Union Summit. The headlines kept appearing and kept driving the single European currency higher as French President Sarkozy and German Chancellor Merkel made a bevy of comments at the conclusion of the much touted EU Summit on Greece. Among the notable comments was a 50% write-down for private Greek bondholders as well as empowering the EFSF with 1.4 Trillion Euros, Other comments about European bank capitalization and the interest of China in EFSF bonds were also notable topics crossing the wires. The flurry of information shot the EUR/USD from 1.3900 to late day levels that have a noted 1.4000 option barrier under a good deal of pressure. Full text »
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New York Session – October 26, 2011 4:13 PM
October 26, 2011
Markets chopped around as there was a flurry of headlines coming out of today’s EU summit. The dollar took a dive initially and then surged on news that EU talks with banks on the issue of Greek haircuts fell short of expectations. Policy makers and bankers are deadlocked on the issue and further discussion is needed. Later in the session the dollar tumbled and the euro rebounded on more positive news regarding bank recapitalizations and levering up the EFSF. EU leaders agreed that banks must have a 9% core capital level and that the target ratio should be reached June 2012. On the bailout fund, there were reports that policy makers plan to leverage the EFSF “several fold” but that the details will be decided in November. There were also reports that China may be willing to help fund the rescue efforts which helped to boost sentiment and the common currency. Full text »
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U.S. Dollar Turns Around and Heads Higher in Forex Trading
October 26, 2011
Euro gives up some of its recent gains
Earlier, the euro was higher in forex trading, as the world looked with optimism on the outcome of a eurozone summit. However, some of that optimism has faded a bit, and the euro is actually heading lower now.
Indeed, the U.S. dollar is gaining the upper hand in currency trading, moving higher as concerns about what’s next for the euro and the eurozone take hold. (Earlier, dollar had softened.) Safe haven is being sought, and gold prices are rising. The Japanese yen is on the rise, sparking talk of BOJ intervention.
For now, it appears as though the greenback is getting a boost. We will have to wait and see what happens next, and whether or not the eurozone leaders can come up with a practical solution for the problems facing the currency region.
See Also
- Economic News and the U.S. Dollar
Forex trading news and information
Bank of Japan Considering Intervention as Yen Rises in Forex Trading
October 26, 2011
Decision likely to wait until after eurozone outcome
The Japanese yen is once again rising against the U.S. dollar in forex trading on the currency market. Safe haven investments, like the yen and gold, are in demand for now, thanks to concerns about what’s next for the eurozone. There are some expectations that eurozone leaders will come up with a solution, but most financial markets are taking a wait and see approach while hedging their bets.
The Bank of Japan is not afraid to intervene when it feels it necessary, and it’s a possibility if the yen goes on strengthening against the U.S. dollar in forex trading. However, leaders are likely to at least wait and see what happens with the eurozone.
If European leaders actually manage to come up with a practical solution — and agree on it — there is a good chance that BOJ intervention will be rendered unnecessary.
See Also
- Yen in Forex Trading
Currency market news and information
London Session – October 26, 2011 8:23 AM
October 26, 2011
Weighing up the chances for disappointment Full text »
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Asia Session – October 26, 2011 1:36 AM
October 26, 2011
Excluding the action out of Australia, Asia saw a pretty quiet session in anticipation of the upcoming Euro Zone Summit to be held later in the day. The EUR/USD remained in a neat sideways range between 1.3890 and 1.3935 as it waits to see if ministers of the European Union can produce a plan to fight the Greek debt crisis and more importantly gain the confidence of the global financial markets. News out over the past day as well as a poor track record of the EU conquering obstacles would seem to allude to the idea that hopes should not be set high for the announcement of a concise plan following the summit. Despite this the EUR/USD is still firmly above the 1.3900 big figure heading into the London session. It remains to be seen how thin the ice the single European currency is skating on really is. Full text »
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New York Session – October 25, 2011 4:04 PM
October 25, 2011
The buck was mostly firmer against its major counterparts except the JPY and CHF as traders took risk off the table ahead of tomorrow’s EU summit. Headlines continued to flow from European officials as policy makers try to make headway on various issues such as the size and scope of the EFSF or other bailout funds (talks of an SPV), bank recaps, and haircuts on Greek debt. The dollar has approached key levels amid the headline risk; GBP/USD is currently testing the 1.60 figure, EUR/USD is approaching the 1.40 level, USD/CAD rebounded from parity and AUD/USD tested the 1.05 figure. The Dollar Index traded within its daily ichimoku cloud and looks to have found support around the 61.8% Fibonacci retracement of the rally from August lows to October highs. Full text »
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U.K. Pound Heads Higher in Forex Trading
October 25, 2011
Sterling gains in currency trading
The U.K. pound is heading higher in forex trading today, gaining after a bit of a reprieve earlier. After losing ground on economic concerns, the sterling is higher in currency trading.
Now, though, the pound is moving up. Indeed, even with the anti-EU protests going on (many Brits want a referendum on staying as part of the European Union), and with worries about what’s next for the British economy, the pound is gaining today.
However, things could change, depending on what happens tomorrow. While Britain isn’t part of the currency union, it is still affected by why happens in the eurozone. Sterling could take a hit if its banks are forced to take a haircut if the EU plan calls for private bondholders taking on more of the responsibility for the sovereign debt bailout.
See Also
- Sterling and Economic News
Currency trading on the FX market
