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U.S. Dollar finishes Mixed; Chinese Revaluation Likely to Pressure Aussie Dollar

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Apr 16, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    U.S. economic reports this morning helped weaken the Dollar after Weekly Initial Job Claims and Industrial Production were less than stellar. The job claims report showed more Americans filed for unemployment aid while factory production came in below expectations. Both reports signaled interest rates would remain low.

    Last night China reported that its Gross Domestic Product grew 11.9 percent from a year ago. This was slightly better than the median guesses of 11.7 percent. The news, that China’s economy accelerated more than expected in the first quarter, raised concerns that it may be overheating, prompting more talk of a possible interest rate like. Traders are also increasing speculation that China may revalue its currency as soon as next week. If this takes place, look for the Japanese Yen to strengthen and the U.S. Dollar to weaken along with the Australian and New Zealand Dollars.

    News that China’s GDP was up slightly more than expected during the first quarter helped to pressure the USD JPY. Technically, the charts indicate that downside momentum could take this market down to 92.26 over the near-term. Traders should also note that the general consensus suggests that the Japanese Yen is likely to gain when China decides to revalue its currency. A revaluation of the Yuan is likely to put pressure on commodity-linked currencies to the benefit of the lower yielding Japanese Yen.

    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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