The USD held onto its gains from the day before and started to raise the eyebrows of investors who may believe the slide in the greenback has almost reached its end. The USD picked up ground against the EUR and also made a slight inroad against the GBP. Core Durable Goods Orders data was released on Wednesday and came in below expectations with a result of minus -0.8% compared to the estimated gain of 0.4%. However the broad number for Durable Goods did show an improvement making the day a mixed bag. The biggest news circulating around the USD was the loud whispers that the Federal Reserve may provide less quantitative easing than originally expected and may carry out the measures on a month to month ratio instead of a sweeping initiative done all at once. This may have added to the stability that the USD experienced and could have been a reason that Wall Street turned in a sluggish performance. The Fed may make an official announcement as early as next week regarding quantitative easing.
The U.S. will release weekly Unemployment Claims today and the number is expected to nearly match last week’s result. The big data that investors are certainly gearing for is the Advance GDP number that will be issued tomorrow. Coupled by the fact that next Tuesday is a critical election day in the U.S. with Congress up for grabs could lead to a very strong air of caution. The currency markets have certainly seen plenty of volatility as ‘fair value’ has been battled for as questions such as Central Bank policies have put investors on a razor’s edge. The USD has certainly struggled the past couple of months, but it has begun to show that it is receiving some backing as the Fed’s policy may becoming a bit more clear. With the GDP number on the calendar for tomorrow and big news days ahead next week, the USD will be a focal point for all.
Written by bforex.com