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24/11/2009 - The Current Market Sentiment 2

Discussion in 'Current Market Sentiments' started by fx-recommends, Nov 24, 2009.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
    Likes Received:
    Marvin King has started The MPC testimony in front of the house of committee today favoring a reduction of the trade deficit for spurring growth and helping the struggling growth in UK which weighed on the British pound as it is well known that the lower currency value gives a competitive advantage to the exports which referred to the BOE governors preferring to a lower currency value currently but later in his speech he has referred to a spike of the inflation in UK in the coming 6 months which brought back the British pound up again as this can tackle taking further easing steps in the near term which can support the British pound again. the cable was trading below 1.65 by his speaking about the inflation upside risks in the near term and after his speech it could come back again above 1.657.
    While germane GDP of Q3 came as expected at .75 and the IFO Business climate of November came better than the market expectation of 92.5 at 93.3, there was no major change of the single currency direction which is still trading around 1.495 versus the greenback which can be supported after the downside revision of the third quarter which came lower than the market forecasting of 3.3% after the 3.5% of the first reading at just 2.8% which can weigh negatively on the US stocks opening today after strong closing yesterday brought the Dow up above 10400 again amid an increasing of the investors' risk appetite which put pressure on the greenback as a funding currency of their carry trades. The Gold could record yesterday a new high at 1173.6 and it is now trying to creep up again above 1170$ as the concerns about the economic growth outlook which looks choppy can increase the asking for it as a safe haven amid an expected delaying of the central banks tightening actions waiting for a solider pace of recovery with a soft talking about the inflation upside risks until now comparing with the economic growth downside risks attention. By God's Will, We wait now for US Consumers confidence figure of November which is expected to be 49 from 47.7 in October and if we are to have further weak data, the greenback can find some reinforcement as the investors can favor taking lower risks at this point.

    Best wishes

    FX Consultant
    Walid Salah El Din
    E-Mail: mail@fx-recommends.com

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