The USD gained on a day that many traders in North America didn’t fully participate in the markets because of holidays in the States and in Canada. The USD picked up ground versus the EUR and GBP and now the question becomes if this is a short term turn of events or a signal that other factors are beginning to weigh on the markets. There was no data from the States yesterday and today will be quiet except for the FOMC Meeting Minutes, which could actually provide insight into any weariness the Federal Reserve has been expressing about the U.S. economy and its ability to battle rather sluggish growth. Tomorrow will remain rather muted with only the Federal Budget Balance planned for release along with monthly Import Prices.
Investors are beginning to gear themselves up for corporate earnings season which will begin soon and this has cast a cautious shadow over Wall Street which has turned in rather lackluster gains lately. There have been plenty of pronouncements from various Fed members the past week and this will continue today, but the question that some are likely asking is if the Federal Reserve’s perceived quantitative easing, which has been on everyone’s lips has now been factored into the market. Certainly election season is beginning to weigh on the results of equities in the U.S. also, as traders take positions based on what they believe which outcome will occur. This coming Friday the U.S. will release Retail Sales data and before that – Thursday – weekly Unemployment Claims are on the calendar. The combination of these two reports could produce yet another punch regarding potential economic prospects. However, the underlying belief is that the U.S. economy is continuing to experience only moderate growth at best and that there is stagnation down the road awaiting. The USD gained yesterday and traders could be greeted with another swift day in the currency markets.
Written by bforex.com