US Growth May Improve in 2012 — Even as Eurozone Growth Decreases

December 30, 2011

US dollar forex trading forecast

The US economy has been showing signs of growth recently, with declining jobs claims, increased holiday sales, better housing data (thanks to pending home sales) and improved consumer sentiment.

As a result of this good news, some expect to see a US economic recovery pick up the pace in 2012 — even as the eurozone economy contracts. With so much trouble in the eurozone, it seems unlikely that there will be a great deal of growth, and Germany may be unable to carry the entire eurozone next year.

This should result in an interesting situation for the US dollar forex trading forecast. Normally, good economic news leads to a lower dollar as commodities gain and equities rise. However, with the euro as an alternative to the greenback, the dollar might actually be supported by better economic news. 2012 promises it will be an interesting year ahead. 

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Greenback Drops Against Commodity Currencies

December 30, 2011

US dollar in forex trading

Greenback is lower against commodity currencies today as oil prices pare losses, and as gold prices surge higher. While gold prices still remain below $1,600 an ounce, they are nevertheless on the rise, and ready to rally.

The news has commodity currencies like the Australian dollar heading higher. Indeed, the Aussie is getting quite a boost in forex trading, since it is tied in large part to gold prices. Even the loonie is getting some play as a commodity currency, even though oil prices remain lower.

Additionally, US dollar may be lower as forex traders close out their end of the year positions, and take profits. Greenback is higher on the year against the euro, even with its losses so far today. 

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Asia Session – December 30, 2011 1:55 AM

December 30, 2011

With many traders looking to get a jump on the long New Year holiday weekend, currency markets in Asia were not unexpectedly quiet. With thinned liquidity, end of year flows helped jam the Aussie dollar higher early on in the session. The moves helped to send the AUD/USD through 1.0170, the AUD/JPY just shy of the 79.00 handle, and the EUR/AUD saw fresh record lows near 1.2725 to complete a 10 or so big figure drop since late November. The EUR/USD remained content within a 1.2925 to 1.2955 range. With no real major news to spark market moves, we saw end of year dealing as a prime mover in the holiday thinned markets. Slightly disappointing Chinese HSBC manufacturing PMI data that came in at 48.7 as opposed to last month’s 49.0 helped put a sour tone on risk for the day as well. Full text » | Technorati | Stumble It!

New York Session – December 29, 2011 6:27 PM

December 29, 2011

NY SESSION UPDATE: Risk rebounds…
<P Full text » | Technorati | Stumble It!

Japanese Yen Gains Against Majors in Currency Trading

December 29, 2011

Yen in forex trading

The Japanese yen is gaining against other majors in currency trading on the FX market today. Concerns about what’s next for the eurozone has the currency market acting a little differently than normal.

Usually, with equities higher, the yen would be lower as forex traders turn to high beta currencies as part of risk appetite. However, even though equities are higher today, the euro and the pound are lower. Yen, considered a stable currency, is higher against the euro, pound and dollar right now.

It will be interesting to see what happens next. But, for now, concerns about the eurozone, and the situation for the global economy (led by a possible slowdown in China) means that yen has the upper hand. 

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Pending Home Sales Rise in November

December 29, 2011

US dollar regains upper hand in forex trading

Pending home sales are rising, with November showing a significant improvement. There are hopes that this data, when combined with jobs data and consumer sentiment data, is an indication that the US economy is getting ready to recover.

It’s hard to tell how forex traders are taking the news, though, since trading is so thin today. There are some expectations that trading will pick up tomorrow, at least a little, as end of the year close outs are made, but light trading is still expected.

The euro did show signs of struggling higher on better economic news in the US earlier, but now the 17-nation currency has fallen back a little bit. Euro is still lower against the dollar on the day, and that isn’t likely to change anytime soon, considering the fact that the eurozone remains dangerously close to the brink. 

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US Jobless Claims News Best in Three Years

December 29, 2011

US dollar inches lower against euro on the news

US jobless claims numbers are improving now, with the four-week average now at the best it’s been in three years. The news is providing life to the equity markets in Europe and the US, as well as helping the euro struggle higher.

The good news about jobless claims and pending home sales is helping the high beta currencies struggle higher today. Euro has been mostly down, but it is finally inching higher on the better news.

Hopes for a US economic recovery are strengthening in light of the latest consumer data, as well as jobless data. It looks as though improvement could be coming, and that is giving a little life to the euro — in spite of all the trouble coming out of the eurozone

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London Session – December 29, 2011 10:10 AM

December 29, 2011

Risk off grips the markets post the Italian bond auction Full text » | Technorati | Stumble It!

Asia Session – December 29, 2011 1:45 AM

December 29, 2011

Once again, Asia suffers through another holiday week sleep fest with an early session bombardment of the Euro the lone notable event of the day. The big move of the week so far was the drop in risk we saw earlier today in New York trading hours, Asia saw a bit of follow through though as traders took advantage of thinned markets and made a full assault on a well noted options barrier at the 100.00 level in the EUR/JPY. The slide from 100.70 to 100.30 helped spark a drop in risk across the board. The EUR/USD slipped from 1.2920 to under 1.2890 while the AUD/USD touched 1.0040 lows after a start nearer to 1.0080. The moves were fleeting however, as the affected risk currencies rebounded nicely to fresh session highs as the morning wore on. Full text » | Technorati | Stumble It!

Gold Prices Continue Sliding on Dollar Strength

December 28, 2011

Forex trading and commodities

Gold prices continue to slide in commodities trading as the US dollar gains strength. Gold prices have dropped below $1,575 today, heading lower for yet another day.

As the US dollar gains strength, gold prices are pressured. Recently, gold hasn’t been used so much as a safe haven as it has as a commodity, and that is showing in the losses experienced by gold during the last week or so. Oil prices are also lower.

Gold usually moves inversely to the US dollar, and the strength of the greenback in currency trading, and the weakness of the euro, means that gold prices are falling back for now. 

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