Tuesday, 1 Sep 2009

USD Soars Following Release of Crucial U.S. Data

The USD soared today against a basket of major currencies. The bullish trend began prior to the publications. However, the better-than-expected ISM Manufacturing PMI and Pending Home Sales data helped accelerate the Dollar's strength since 14:00 GMT. The USD also rose on higher risk aversion, as the U.S. equity market tumbled, led by financial shares. Therefore, today the USD was the alternative investment from equities, commodities, and other major currencies.

The USD made some significant gains today against the GBP by about 150 pips at the 1.6160 level. The GBP'S weakness was largely owed to weak British figures earlier today, such as Manufacturing PMI and Net Lending to Individuals. Additionally, the GBP slid as fears remerged about the financial sector too. The EUR/USD pair fell dramatically by over 120 pips to the 1.4230 level.

What we have seen as of late is that positive data from both the U.S. and Euro-Zone seems to push-up the U.S. Dollar. This trend may continue, as the U.S. attempts to re-emerge out of recession. Looking ahead to late night trading, you are advised to follow the release of the Monetary Base publication from Japan at 23:50, as this may help determine the strength of the JPY'S main pairs, such as the USD, EUR, GBP, and CHF.