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Investor Demand for Higher Risk Sinks U.S. Dollar

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Sep 22, 2009.

  1. forextrends24

    forextrends24 New Member

    Mar 27, 2009
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    Today’s sample of Forex Analysis from ForexHound.com

    The U.S. Dollar plunged to a new low for the year as global investors aggressively bought higher risk assets such as equities and commodities. The fact that this buying took place one day ahead of the Fed’s FOMC meeting indicates that traders have confidence that the Fed is going to leave interest rates at historically low levels for some time.

    The EUR USD posted a strong gain for the day and close near the high for the year. Euro traders are speculating that the U.S. Fed is going to leave interest rates low relative to the European Central Bank’s benchmark rate. Traders seeking higher yields are taking advantage of this interest rate differential.

    GBP USD investors ignored the weak U.K. economy and the possibility of a new financial crisis and drove the British Pound higher. Technically oversold conditions also contributed to the buying spree. The main trend is down and most traders feel this market will have to build a new support base in order to support a strong rally. Otherwise, the weak fundamentals indicate that this rally may be short-covering.

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

    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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