Friday, 24 Jul 2009

EUR Appreciates at Week's End; Risk Appetite Returning?

Today's trading can be summarized by simply pointing out the bouncing up and down of the major currencies. Focusing on our two primary currency pairs, the EURUSD and GBPUSD, we can see this trend very clearly. The EURUSD began today's trading session near a low of 1.4140 - that was after a sharp fall of 120 pips at the end of trading yesterday - followed by a return towards 1.4260 in late trading.

The GBPUSD was not much different; starting the day near 1.6550 - after a 2-day climb - and began to depreciate throughout the day towards 1.6440. Germany's Ifo Business Climate report highlighted a continuation of the rising confidence in the Euro-Zone's largest economy and also demonstrates how a return to risk appetite is indeed occurring. This lends weight to a weakening USD against the EUR, but the positive news in Europe has in fact devalued the GBP, which explains why it underperformed the world's primary safe-haven - the USD - during a return to risk.

This trading week has been rather exciting as we've seen stable trading among most pairs, but volatility in the ones most traded, which creates the most profit for investors. Were you one of them?