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U.S. Dollar Struggles to Maintain Gains

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Feb 19, 2010.

  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 Index finished higher on Friday while eking out a small gain for the week, but the trading action during today’s session indicates that it may be overbought. Following a strong overnight surge to the upside following the Fed’s discount rate hike late Thursday, the Dollar topped early in the trading session then struggled to stay positive the rest of the day.

    By mid-session it looked as if traders were shrugging off the Fed’s discount rate hike. Traders seemed to be treating the action by the Fed as something the central bank had to do to encourage banks to borrow from the private sector. At the start of Friday’s trading session, investors reacted as if the Fed had begun to tighten its monetary policy. This was not the case, however as the Fed reiterated its position through the media that interest rates will not rise for an “extended period”.

    To recap the week, the Federal Reserve hiked the discount rate 25 basis points to 75 basis points late Thursday, sending the U.S. Dollar sharply higher. This buying spree spilled over into the overnight trade pushing the Dollar Index closer to the all-important major 50% level at 82.63.

    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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