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U.S. Economic Data Drives Dollar Higher

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Feb 4, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    Stronger economic data this morning helped drive shorts out of the Dollar and triggered a surge to the upside which put the U.S. Dollar Index in a position to post a six-month high.
    Early in today’s trading session, the Dollar was trading lower as appetite for risk drove up demand for higher yielding assets. Trading was once again subdued due to tomorrow’s European Central Bank and Bank of England announcements. Many major players are also trading lighter ahead of the U.S. jobs report on Friday, February 5th.

    This morning’s ADP Employment Report showed that fewer jobs were lost during January. This lent credibility to the notion that the economy is improving and that Friday’s Non-Farm Payrolls Report may actually show positive jobs growth. Traders are now feeling more confident about the economy. Some are speculating that Friday’s jobs report may actually show positive growth.

    In another report, January’s ISM Non-Manufacturing Index crossed the 50 level indicating that momentum was turning to the upside. Following the release of these reports, traders reversed the course of the Dollar, indicating that investors were shifting their focus away from risk and on improvement in the U.S. economic outlook. Global currency markets sold off as demand dropped for higher yielding currencies. Both reports supported the Dollar because they provide the Fed with more information needed to begin raising interest rates.

    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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