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Stable U.S. Equity Markets Help Limit Dollar Gains

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Nov 28, 2009.

  1. forextrends24

    forextrends24 New Member

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

    Overnight the Dollar climbed sharply higher as global investors dumped stocks and commodities on concerns that Dubai World’s debt problems would escalate into a worldwide credit crisis similar to the one the U.S. faced when Lehman Brothers collapsed in 2008. Fear raced through the global investment community, making lower-yielding assets such as the Dollar and the Yen more attractive. The situation in Dubai began to break late Wednesday night and spilled over into Thursday while U.S. markets were closed for the Thanksgiving holiday.

    The U.S. Dollar gave back over 50% of its early morning gains as investors took profits after a strong two-day rise. The inability to break equity markets lower after the opening helped drive up demand for higher risk assets. Investors began selling the Dollar after it became clear that there would be no panic selling of higher risk assets.

    Investors began to liquidate higher risk assets when the largest corporate entity in Dubai asked creditors for a six-month postponement of $60 billion in debt payments. This action by the Dubai entity raised concerns that other emerging market entities may be overextended in debt which could lead to even more liquidation.

    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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