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Strong Industrial Data Drives Euro Higher

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jul 22, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    The U.S. Dollar fell sharply across the board on Thursday as trader demand for risky assets soared following a bullish economic report out of Europe last night. The release of a better-than expected Euro Zone industrial report combined with Bernanke’s dovish testimony sent a signal to investors that the European Central Bank is moving closer to a possible rate hike while the Fed is still struggling with the possibility of a double-dip recession.

    Furthermore, the bullish Euro Zone numbers is a sign that the ECB is likely to refrain from applying additional stimulus measures while the weakening U.S. economic data means the Fed is likely to consider a second round of quantitative easing.

    The strong rise in the Euro spread to other currency markets as traders positioned themselves for a weaker U.S. economy. Traders demanded higher yielding assets as they anticipated the Fed leaving interest rates lower for a much longer period of time than previously estimated. U.S. Treasury Bond traders are currently pricing in the possibility of a Fed rate hike for September 2011. The bullish news about the Euro Zone and the dovish outlook for the U.S. economy is especially bullish for commodity-linked currencies.

    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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