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U.S. Dollar Reverses Early Trend to Close Higher

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Oct 20, 2009.

  1. forextrends24

    forextrends24 New Member

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

    The Dollar opened lower this morning, driven to a 14-month low by demand for higher risk assets. Traders were buying equities and commodities while selling the Dollar on expectations of a strengthening global economy. Sentiment shifted however after the release of weaker than expected U.S. housing and Producer Prices. Both reports caught traders by surprise as many thought bullish earnings news from Apple, Inc. would set a bullish tone for the day. Instead, traders opted to let these two bearish reports set the tone for the day.

    Traders fearing a weakening economy and the threat of deflation halted their demand for higher yielding assets and began seeking the shelter of the U.S. Dollar and Treasuries. The Dollar rose throughout the day as bottom pickers entered fresh positions and overbought currencies gave back recent gains.

    The EUR USD opened higher as investors chose to ignore concerns voiced by Trichet and other Euro Zone Financial Ministers regarding the rapid rise in the Euro and its possible detrimental effects on Euro Zone exports. Traders drove the Euro higher until the buying stopped slightly below the psychological 1.50 barrier. Today’s action suggests that a combination of verbal intervention and high prices may lead to a break in this market to a more reasonable level.

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

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