Friday, 10 Jul 2009

USD Reversal in the Making?

Since the commencement of today's trading, the Dollar has made a reversal against a number of its main currency pairs. This includes both the Euro-Zone and Swiss currencies. This behavior may be owed to overselling of the USD in yesterday's trading. Additionally, analysts state that the some of the USD's strength today may be due to traders realizing that China's statements at the G8 Summit regarding replacing the USD as the global reserve currency may have been exaggerated.

The greenback is trading higher against the EUR by about 80 pips at 1.3894 so far today. In addition, the GBP/USD cross is also trading higher, as yesterdays better than forecast U.S. Unemployment Claims gives the USD strength today. Crude Oil continues to tumble today, both due to Dollar strength and investors realizing that the commodity was overvalued in recent weeks. The decline in Crude may continue into next week's trading.

Looking ahead to the opening of the U.S. market, we can expect the U.S. Trade Balance figures at 12:30 GMT. Traders are advised to follow the speech by Treasury Secretary Timothy Geithner at 14:00 GMT, as this may lead to high volatility in the forex market in late trading. We may see the USD make additional gains today, largely due to leading economists recently raising forecasts for the growth of the U.S. economy. Therefore, traders should take advantage of the new tend for the U.S. Dollar now!