Forex Trading TV Video Blog

Yesterday, the USD had a strong trading day supported by a bullish trend against its most rivaled currencies. The greenback’s positive momentum occurred thanks to yet another day of falling oil prices and renewed views in the market that the U.S. economy is showing some signs of recovery a day after the Federal Reserve maintained interest rates at the same level. Some of the more notable currencies to fall against the greenback were the euro, which fell to a seven week low of $1.5398, its lowest intraday level since June 16. Against the JPY the USD hit a seven-month high at 109.39, its highest value since January.
On Tuesday after the Federal Reserve held its benchmark federal funds rate steady at 2% and signaled in an announcement that there is no rush to raise borrowing costs, many analysts perceived that the real reason on this decision was more based on worries about economic growth than about inflation. But certainly as a result of the there looks to be a renewed environment for risk appetite, propitiating investors to seek refuge in “carry trading”.
Today the US economy will provide some significant market making news. Traders must follow the Unemployment Claims report, one of the most influential USD indicators, is forecasted by analysts to show a decrease of 28k jobless individuals, from 448K last week. At 14:00GMT we have the Pending Home Sales, which is forecasted to decrease by 1.0%. Such results should outcome provide a volatile session; traders should follow today’s events with extra caution.

The dollar strengthened against all of the majors as it traded at a 7 week high during yesterday’s trading session and continues its romp this morning. The USD gained over 100 points against the Euro to close below 1.55. More importantly for the dollar was the direct relationship between US fundamental data and the bullish momentum. Another day of ‘positive’ US news strengthened investor confidence in the Greenback and could continue to be the catalyst for more appreciation. The ISM Non-Manufacturing Composite index came in at 49.5, higher than expectations and 1.3 points higher then previously published. While the manufacturing index is on the rise it has yet to eclipse a mark of 50, which would indicate expansion in the sector. Still though, such a significant numerical rise was enough to spark market confidence in the rising dollar and hint that nationwide economic expansion in 2008 is still feasible. Also released yesterday was the Federal Fund Rate which stayed put as projected at 2.00%. While this had little effect on the market, the accompanying statement from the Federal Open Market Committee sparked more bullishness in the dollar. The FOMC Statement stated in part that the Federal Reserve’s estimation of inflation will continue to depreciate into next year, hopefully giving some closure to market woes in the US. With the new findings being added to the current stock market rally in America, currently at its highest mark since April, and the shocking drop in Crude Oil prices, the USD looks to have once again escaped some disastrous circumstances.

On tap for today only one indicator will be released from the US event calendar. Crude Oil Inventories are expected to rise from -0.1M to 0.1M. The inventories indicator has grown in significance in recent months, as the fluctuations in Oil prices have become one of the most important market movers. Forex traders are advised to follow crude oil prices and equity market movements before placing their transactions.