US Data Sends US Dollar Higher in Forex Trading, Gold Prices Lower

February 3, 2012

Greenback in currency trading

US economic data has crushed estimates and the first news is sending the US dollar higher in forex trading. Indeed, the news that the unemployment rate has fallen to 8.3%, and that the economy added 243,000 jobs in January has boosted demand for the US dollar.

The good news out of the US stands in contrast to the disappointing news out of the eurozone. Disappointing regional data is dragging on the euro so that it cannot take advantage of an environment of risk appetite.

Plus, the US dollar is showing such strength in forex trading that gold prices are pulling back. Gold has been steadily gaining strength, and the combination of profit taking, plus a stronger dollar, is enough to send gold prices lower today.

Euro Falls on Disappointing Regional Data

February 3, 2012

Euro in forex trading

Euro is falling today, in spite of the general inclination toward risk appetite right now. The latest news out of the eurozone is providing disappointment, and that is sending the euro lower in forex trading.

Retail sales information for December shows an unexpected drop, led by France and Germany. These are the two largest economies in the eurozone, and quite influential in terms of how the rest of the eurozone functions. This news has been quite a blow and has resulted in a lower euro in forex trading.

Indeed, euro is down in forex trading as the US dollar rises on better than expected jobs data. The prospect of economic recovery in the United States is balanced against economic disappointment in the eurozone, and the euro is losing out today in forex trading.

New York Session – February 2, 2012 4:22 PM

February 2, 2012

Markets were relatively quiet ahead of tomorrow’s employment report and the dollar traded slightly firmer amid Fed Chairman Ben Bernanke’s testimony in Washington. The Fed Chairman warned of fiscal policy risks and called for close monitoring of economic developments. On the Fed’s mandates, he said that inflation looks “very well controlled” but that the Fed wants more progress on unemployment. When questioned on the topic of QE, Bernanke only noted that the policy is similar to the usual policy of cutting rates. Economic data released this morning showed that U.S. weekly initial jobless claims fell by 12k to 367k from the prior 379k (cons. 371k). The data was better than expected and showed that the labor market is slowly progressing but at a sluggish pace. Sentiment is mixed as markets have now shifted focus to tomorrow’s BLS report. Full text »

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Euro Pulls Back in Forex Trading

February 2, 2012

Uncertainty sends euro down on risk aversion

There is just enough uncertainty in the FX market to send the euro lower today in forex trading against the US dollar. The 17-nation currency is heading lower as concerns about Greek debt remain, and as forex traders consider the United States.

Indeed, Ben Bernanke just told Congress that the United States remains vulnerable to financial problems as long as the issue of the deficit is avoided. The result is that there is uncertainty, even with recent good news out of the eurozone and even out of the United States.

For now, euro is pulling back, moving lower against the dollar and unable to regain the momentum from its recent rally.

Initial Jobless Claims Fall, US Dollar Gains

February 2, 2012

Focus on other data, and risk aversion, in the FX market

Initial jobless claims fell last week, but the news isn’t spurring risk appetite. Instead, forex traders are focusing on other news right now. Concerns about corporate earnings, skepticism about a Greek deal, and uncertainty about Ben Bernanke‘s Congressional testimony later on all have forex traders a little jittery.

As a result, the US dollar has the upper hand against high beta currencies like the euro and the pound. US dollar is moving in tandem with gold prices right now, heading higher with gold, even as oil prices pull back.

It looks like an interesting day ahead. The forex trading forecast is likely to be a bit unsettled. Forex traders are looking for direction, and there are too many conflicting signals for anyone to really see some solid direction on the FX market.

Initial Jobless Claims Fall, US Dollar Gains

February 2, 2012

Focus on other data, and risk aversion, in the FX market

New York Session – February 1, 2012 4:14 PM

February 1, 2012

The greenback was broadly weaker as overall risk sentiment extended to the upside following stronger than expected global manufacturing PMI’s in Asia and Europe overnight. Markets shrugged of softer private payrolls data with ADP showing the addition of 170K jobs in Jan. (cons. 182K) and even though the Jan. ISM manufacturing reading missed the consensus, it expanded to the highest level since May with a print of 54.1 from the previous 53.1 (cons. 54.5). The details of the report were strong with backlog of orders rising above the key 50 threshold to 52.5 from 48.0. December construction spending was also a bright spot with a monthly increase of 1.5% (cons. 0.5%). Amid the improving sentiment, the Dollar Index was rejected from the top of its daily ichimoku cloud and Tenkan line which we have previously noted as a key technical level. Full text »

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Positive UK Data Helps Pound in Forex Trading

February 1, 2012

Sterling higher in currency trading

Positive manufacturing data out of the UK is helping the pound today in forex trading. The news about manufacturing was better than expected, and this is helping the sterling against the US dollar in currency trading.

Indeed, the news has some hoping that Britain’s economy is ready to show signs of recovery. Britain has been in a tough place lately, with slow economic expansion, but inflation higher than the Bank of England has been comfortable with.

There are hopes now for the British economy, and that is being reflected by the pound’s improvement in forex trading. Also boosting the pound is the fact that stock markets are higher today. Equities around the world are gaining ground on general risk appetite, and that is helping high beta currencies like the pound in their performances against the US dollar.

Japanese Yen Gains Against the US Dollar

February 1, 2012

Yen higher in forex trading

Japanese yen is gaining against the US dollar in forex trading today, heading higher as concerns about the US economy persist. Even though there is some good news coming out of the States, the yen is gaining right now.

However, the gains by the yen are making Japanese officials nervous. They are concerned about an appreciating yen that could very well cause problems for exports. As a result, Finance Minister Jun Azumi stands ready to intervene in the FX market if it becomes necessary.

Japan has already shown its willingness, on more than one occasion, to interfere directly with the FX market in order to keep the yen weak. If yen continues to gain strength against the US dollar in currency trading, there is a good chance that Japanese officials will take direct measures.

Could the Facebook IPO Boost the US Dollar in Forex Trading?

January 31, 2012

Dollar outlook could improve by dollar assets and employment from Facebook

The Facebook IPO is fast approaching, and it is expected to be one of the biggest offerings in history. The Facebook IPO has been expected for years now, and many are expecting great things.

One of those things, some think, is a boost for the US dollar. With the US dollar held back by a lack of demand for dollar denominated assets, as well as held back by employment concerns, the Facebook IPO may be just what is needed.

The Facebook IPO is expected to result in jobs, hopefully boosting the US economy. Additionally, dollars will be in demand as investors scramble to invest in Facebook, which will be a dollar-denominated asset.

How long a Facebook related boost to the US dollar would last is, of course, up for debate. But some feel that the US dollar forex trading forecast is about to become much more interesting.