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U.S. Dollar Strengthens after Stock Market Backs Away from Top

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Nov 12, 2009.

  1. forextrends24

    forextrends24 New Member

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

    The U.S. Dollar is recovering after hitting a 15-month low against a basket of currencies this morning. A break from the top in the equities markets seems to have triggered a short-covering rally. Concern that the demand for higher risk assets may be too strong is most likely leading to the downside reaction in the other currencies.

    The EUR USD failed just short of the recent top at 1.5062. Traders have been hesitant to maintain upside momentum each time it’s neared this level over the past few weeks. Fear that a move over this price may induce a stern warning or even stronger action from the European Central Bank may be triggering this adverse reaction by investors.

    Comments from Bank of England Governor King regarding additional quantitative easing and a lower British Pound, is putting selling pressure on the GBP USD. Although the BoE believes the U.K. economy is beginning to recover, comments suggest that lower interest rates, government spending and quantitative easing may not be enough to maintain the recovery. King feels that additional measures may have to be taken because strength remains “highly uncertain”.

    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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