Forex Analysis: USD is continuing to do well
Wednesday, December 23rd, 2009On Tuesday, the USD continued to do well in very light trading, holding on to small gains in response to a moderate rise in US Treasury Bond yields.
Nevertheless, the USD did have a hard time getting past the Yen and Euro, since the concern over the recent adjustment sent some Forex traders out of the greenback.
The US Department of Commerce has revised last November’s GDP data, which showed a 2.8% growth for the third quarter.
This revision shows a 2.2% growth rate, whereas market analysts predicted that the 2.8% would remain.
Data also has shown that existing home sales in the US rose in and unexpected 7.4% in November, a three year high.
Although the news appear to be good, the excitement has been muted by the disclosure that home prices have fallen to their lowest level since 2005, together with the fact that much of the home purchasing has been done with grants and subsidies from the Federal Government.
At the present time, the market is not sure when the economy will recover. There are considerable pieces of data that are contradicting one another.
Since the recent USD has been based on short-coverings; the traders are sizing up their options for the next year and hedging themselves against any possibility.
At 10:00PM GMT, the US Dollar was trading down 0.04% against the Euro to 1.4278, up 0.55% to the Japanese Yen to 91.67, down 0.4% against the British Pound Sterling to 1.5961, down 0.3% versus the Canadian Dollar to 1.0589, down 0.33% against the Australian Dollar to 0.8783 and up 0.26% against the Swiss Franc to 1.0489.
JPY Trading – The Yen has been down across the board, as investors have continued analyzing last week’s declaration of “war on deflation.”
On Tuesday reaffirmed Masaaki Shirakawa , Japan’s Bank Governor, that BOJ shall maintain its current “effective zero interest rates” and is ready to act to fight deflation.
Japan, an export economy is being hurt by the recent rise in Yen value since major consumers of Japanese products, the US, Europe and Great Britain, are having problems maintaining strong currencies.
At 10:20PM GMT, the Japanese Yen was trading down 0.6% against the Euro to 130.91, down 0.33% against the British Pound to 146.57, down 0.3% to the Australian Dollar to 80.55 and down 0.55% versus the Swiss Franc to 87.52.
