As expected, there was very light volume in trading yesterday but high price volatility for the EUR/USD. The pair climbed as high as the 1.4360 mark. After the 1.4000 support line was broken, a corresponding rally in Crude Oil prices was seen due to a weaker Dollar. The pair ended the day down at 1.4043.
The pullback of the EUR during the financial crisis has been largely eroded as the year end approaches, leaving the Dollar range trading between 1.3900 and 1.4200. This type of trading may be seen throughout the remainder of the year as curr... ( read more )
Archive for December, 2008
December 30, 2008 - Recent Rate Cuts Take The GBP Down
The GBP continues to head lower against the EUR as Britain may have a further Interest Rate cut priced into the EUR/GBP. There is a lot of negative news currently circling the GBP/USD, and the comments by European Central Bank (ECB) President Trichet that the ECB may hold Interest Rates steady in the near future may lend further support for the EUR. Also signals from the Bank of England show a potential rate cut in the future for Britain. Last week the EUR/GBP briefly hit an all time high, very close to a 1-1 trade parity. Yesterday the pair en... ( read more )
December 29, 2008 - The Greenback Weakens as Holiday Shopping Disappoints Re...
After the Christmas holiday passed, many retail stores were expecting a small reversal to the recent economic slump seen around the world. Post-holiday shopping discounts usually lead to a vast increase in consumer spending. This year, however, the credit crisis and economic recession have consumers worried about home financing and individual savings more than holiday shopping, and retailers are feeling the pinch.
For the first time in decades economists are saying that we are heading for another Great Depression. With stocks continually sli... ( read more )
December 23, 2008 - Low Trading Volume Brings Volatility to the USD
The light trading that is typical during the close of the year is having an impact on the movement of the Dollar. National holidays in Japan have significantly limited the amount of liquidity in the forex market, while the approaching holidays in the U.S. has left trading desks working on a skeleton staff. This has led the EUR/USD to trade in large price swings lately due to the limited amount of players increasing the pair's volatility.
At one point in yesterday's trading, the Dollar reached as low as 1.3923. Despite the difficult market c... ( read more )
December 22, 2008 - US Auto Bailout a Blessing and a Curse; Will the USD Rec...
Things are looking down for the U.S. automotive industry as the proclaimed bailout has now been considered a delay for the inevitable rather than disaster prevention. While not certain, of course, the prediction by many analysts that the 3 auto giants (GM, Chrysler, and Ford) may in fact still face significant problems despite receiving bailout funds has helped weaken the strengthening position of the USD over the weekend.
Ending last week's trading around the 1.4000 level against the EUR, the USD actually made strong gains after spiking up ... ( read more )