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Dollar posted strong gain after break in economic report

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Oct 31, 2009.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    The U.S. Dollar posted a strong gain after bearish economic reports this morning triggered a massive sell-off in U.S. equity markets. Investors were encouraged to dump higher yielding assets for the safe haven Greenback. Two different reports indicated a drop in consumer spending and sentiment. U.S. Personal Income was flat but Personal Spending indicated that consumers are still paying off debt and saving their money. The drop in the Michigan Sentiment showed that consumers are still uncertain about the economy mainly because of fear of losing their jobs.

    All of the currencies that moved higher on the bullish U.S. Third Quarter GDP Report on Thursday gave back their gains. Some even exceeded yesterday’s lows as selling momentum was strong all day. This reaction the day after the GDP Report proves that investors have put this report behind them and are now looking at the future of the economy. Today’s reaction shows that investors are worried that without government and Fed stimulus, the road to recovery will be rough.

    Next week investors will have to deal with a Fed FOMC meeting and the Non-Farm Payrolls Report. Investors expect the Fed to change the language of their statement to indicate that a hike in interest rates may be coming sooner than expected. The Non-Farm Payrolls Report should show an increase in jobs lost and an unemployment figure close to 10%. A worse than expected report will make investors question whether the economic expansion during the 4th Quarter will be able to meet the 3rd Quarter number.

    Read full article at ForexHound.com as well as Forex Analysis, Forex Education and exclusive timely market Gann Analysis

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