USD – Manipulation, But From Who?

The song has remained the same the past two trading days. The USD continues to show weakness and face stiff tests from the other major currencies as the greenback essentially has been put under pressure (apparently willfully) from its own Federal Reserve. While it is not a direct intervention by the U.S. publically, in reality the talk about imminent quantitative easing (the purchasing of U.S. treasuries) has taken the USD to the lowest ebbs of its trends. While there are definitely ranges to be found and trading is seldom a one way avenue there can be no denying the momentum that has occurred the past month. The question is this, when will the USD move be considered to be overdone? Yesterday weekly Unemployment Claims were released and once again turned in a disappointing number, highlighting that the jobless situation in the U.S. remains rather bleak taking into account the fact that the States had enjoyed ‘full’ employment for a large stretch of years.

Today Retail Sales figures will be released from the U.S., but also on the schedule is a pronouncement from the U.S. government which will focus on China and its ‘manipulation’ of the Yuan. Core Retail Sales today are expected to show a gain of 0.4%. Quarterly earnings will also continue to emerge from corporate American and Wall Street has shown a tenacious ability to hold onto its gains. However, Wall Street has also given off signals that its participants are not exactly all positive and the results across the broad indexes have often been mixed. The USD is trading on sentiment surrounding the Federal Reserve and standing in the wake are many nations currencies that have been ‘adversely’ effected. Going into the weekend investors will keep their focus on the U.S. government’s currency dictates and keep in mind that reversals can often appear when unexpected.

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