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Aversion to Risk Drives Up Dollar

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Nov 3, 2009.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com


    The U.S. Dollar managed to hold on to its gains despite the strong rally in the gold market. While the weaker Dollar has been blamed for the August to October rally in gold, stronger gold is not expected to drive the Dollar to new lows. The fundamentals have shifted. The Dollar is getting stronger because of investor aversion to risk while gold is up because of central bank demand.

    The EUR USD traded sharply lower after trading inside of a tight range for the past four trading sessions. Traders expect the European Central Bank to leave its benchmark interest rate unchanged at 1%. In addition, the ECB is expected to say that stimulus plans will remain intact until the economy starts to show signs of a full recovery.

    Pressure was on the GBP USD this morning, but a strong surge in gold helped the Pound erase some of its early losses. Speculators are looking for the Bank of England to leave interest rates at historically lower levels while extending its asset purchase program.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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