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USD JPY Tumbles as Return of Risk Aversion Rocks the Markets

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jan 21, 2010.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com

    The USD JPY reversed its four day rally as traders sought safety in lower yielding assets following an announcement by President Obama to curb trading at financial institutions. The immediate reaction was to sell higher risk assets after Obama called for a reduction in the size and trading activities of financial institutions. The downside reversal in the USD JPY sets up a test of a major 50% price at 89.30.

    The U.S. Dollar traded mixed against most major currencies as profit-taking and volatility dominated the trade. Earlier in the session, the U.S. Dollar surged as traders took protection against a shift in China’s expansionary monetary policy.

    The overnight announcement, that China’s economic growth and inflation figures exceeded expectations fueled speculation that it was poised to begin restricting loans and ending stimulus. Fear that the economy may overheat triggered demand for lower yielding assets at the expense of higher risk stocks and commodities.

    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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