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Stocks Hold on to Gains despite Strong Dollar

Discussion in 'Forex Daily News & Outlook' started by futuretrends24, Dec 11, 2009.

  1. futuretrends24

    futuretrends24 New Member

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    Today’s sample of Futures Analysis from FuturesHound.com

    The December E-mini Dow and December E-mini S&P 500 posted strong gains on Friday but closed unchanged for the week following the release of bullish retail sales and consumer confidence reports. Both reports indicate the economy is on the road to recovery and could give the Fed enough evidence to issue a more hawkish statement at its next meeting on December 16th. The S&P 500 closed above a retracement zone, indicating possible strength next week. The upside target for this market remains 1122.00. A bearish scenario could develop if Dollar traders aggressively begin to unwind carry trade positions.

    March Treasury Bonds and Treasury Notes finished the week sharply lower as investors drove up yields because of concerns over the mounting U.S. debt. This week’s Treasury auction ended on a sour note when investor demand for 30-Year Bonds was lower than expected. Today’s friendly reports did not help matters because they may have given the Fed the confidence it needed to hike interest rates.

    The stronger Dollar hit the February Gold market hard this week, sending it within striking distance of a 50% level at $1107.40. A break through this price could trigger a further decline to $1079.00. The heavy volume in this market the past two weeks indicates that speculators are selling out of long positions with both hands.

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

    Disclaimer: Trading on 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.
     
  2. Rider

    Rider New Member

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    The dollar fell 0.6% to ¥88.50, unable to sustain a jump to around ¥89 after Dubai's announcement. Traders cited Japanese exporters selling the greenback after its rise.

    The retreat in dollar/yen helped to prompt a broad buyback in the yen, which recovered from initial selling against higher-risk currencies, including sterling and the Australian and New Zealand dollars.

    Traders looked ahead to a two-day Federal Reserve policy meeting, which begins on Tuesday.

    The U.S. central bank is likely to keep rates unchanged near zero, but the focus will be on the accompanying statement and whether the Fed reiterates a dovish bias and does not fully acknowledge the recent run of strong data.

    The surprisingly strong reading of U.S. consumer data on Friday, coming on the heels of a lower-than-expected fall in non-farm payrolls earlier this month, had boosted the dollar.

    Such signs of a recovery in the U.S. economy have raised some speculation in the market that the Fed may wind down loose monetary policy sooner than markets had been expecting.

    "We had a one-two punch of the payrolls and the retail sales data, so maybe the market is getting optimistic about a U.S. recovery," said Rumpeltin at Nomura.

    "But we don't think the market should get ahead of itself and start to anticipate an early Fed rate rise."
     
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