Friday, 15 Oct 2010

USD Makes Gains Following Bernanke Speech

The US dollar recorded some fairly significant gains in trading on Friday, as confidence in the US economic recovery has gone up. Analysts are quick to say that another round of economic stimulus, often called quantitative easing, is still very likely to occur in November, although the scope of the stimulus is debatable. Following a speech from Fed Chairman Bernanke, the greenback moved up on the euro and Swiss franc in afternoon trading. The EUR/USD is down well over 100 pips for the day, and currently stands at the 1.3975 level. The USD/CHF shot up almost 100 pips from this morning and is currently trading at the 0.9580 level.

Turning to next week, traders can expect a wide range of economic releases out of the US, which are likely to influence most of the major currency pairs. On Monday, the TIC Long-Term Purchases figure is widely seen as the most significant indicator. On Tuesday, traders will want to pay attention to the US Building Reports. In addition, any news regarding a fresh round of stimulus from the Fed, as well as any indication that the Bank of Japan will move in to further devalue the yen, are likely to generate extreme volatility in the marketplace.