The euro/dollar forex pair has been fluctuating between 1.2975 and 1.33 in the last 4 weeks. Relief over Greece’s bailout agreement should have sent the pair up but, alas, nothing happened – really nothing, no directional movement of substance.
The U.S. dollar gained against its European counterpart yesterday throughout the whole day, during the European as well as the American forex trading sessions, as confidence about the US growth prospects grew. Yesterday, the ADP reading of the monthly non-farm employment came out way stronger than expected which gave a huge boost to the US dollar against the euro on forex markets. Nevertheless, traders on the New York Stock Exchange largely stayed on the sideline awaiting the official numbers of the Non-Farm Payrolls due out tomorrow at 08:30 EST.
The US dollar climbed up higher against the euro and pared losses against the Japanese yen earlier today as surprisingly weak US economic data – 500,000 more jobless claims for last week – weighed on stocks enough to prompt forex traders to look for the supposed safety of the UD dollar. 8NM4X2CEYCZ4
The Turkish lira’s exceptionally strong performance has provoked a spat between Trade Minister Zafer Caglayan and the Central bank. A widening current-account deficit may favor those wanting a weaker currency.
“You’ve got foreigners still looking to buy the lira and you’ve got locals selling the dollar when the lira weakens,” Tim Ash, head of emerging market research at Royal Bank of Scotland Plc in London said in an e-mail interview with Bloomberg. “In previous years, we’ve seen a current account deficit of 5 to 6%. A 4% deficit still seems financeable in the environment we’re in.”
The Canadian dollar was buoyed by skyrocketing oil prices until recently. The loonie, as it is sometimes called, has turned into a petrocurrency (commodity currency of an oil exporting coutnry). Don’t forget that Canada has become the United States’ No. 1 supplier of crude oil. So, while other major forex units like the yen, the pound and the euro have recently slumped against the greenback, the Canadian dollar has soared.
New home sales in the US of A turned out to be quite optimistic at 330,000 as opposed to the expected number of 317,000. The reading for June was 267,000. This gave a boost to the Dow Jones Industrial Average index and to the euro, as well.
Whatever the news is form the US this week, the dollar is going to get weaker, I believe. I’m rather bullish on the euro, as it’s been trying and trying to break through the resistance levels above 1.30, and I think one of these days it’s going to succeed.
Warning signs exist when brokers don’t want to allow withdrawal of monies from trading accounts or when glitches are to be found on the trading platform. For instance, ask yourself whether you can open or close a position during news or data release if it is not as expected and volatility is high? If you can’t withdraw money (it’s your own money after all), warning signs should flash. If the trade station doesn’t operate to your liquidity expectations, that’s a no-no and should get you nervous. Don’t be gullible. Always be on the lookout for pie-in-the-sky promises in promotional material that guarantees a high level of performance.
Remeber: only about 1 in 4 scammed people receive any lost funds even after they go through the legal channels to right the wrong done unto them, therefore caveat emptor (Let the buyer beware).
The greenback index ended Friday at 84.41, down from 84.68 in late American trading on Thursday and 85.342 from the previous week’s closing value.
The index reached its lowest level in almost 2 months after Friday’s Non-Farm Payroll report (the infamous NFP) came out weaker than it was expected to be. Forex analysts say that the recent moves in the dollar can be attributed to low trade volume as U.S. markets will be closed on Monday for Independence Day.
After reaching the upper boundary of the downtrend channel (on a daily chart), USDCAD pulled back from 1.0466. Deeper lows down to 1.0250 probably would be seen. The major resistance is now at 1.0466. A break-out above this level will indicate that the downtrend from 1.0850 is complete.
