The USD made a strong start on Monday and then allowed the EUR and GBP to bounce back from their lows. Powering to new highs the USD started to find some resistance as the day developed and began to range trade. Wall Street began the day on a slightly positive note, but was not able to sustain its gains and market uncertainty took its toll by the end of the trading session as the major indexes suffered. There was no economic data from the U.S. yesterday, but Ben Bernanke did make an appearance in the evening and said he believes the American economy remains on the path of recovery, but he cautioned that it would not feel strong until the unemployment numbers improve. Bernanke went onto say that the U.S. has the capability of avoiding a double dip recession. Today will remain quiet for government data and it will only be on Thursday with the weekly Unemployment Claims and on Friday with the Retail statistics, that investors will have numbers to really bite into.
Until the U.S. releases formidable data, investors will be left to work off of existing sentiment and news which is being generated from the corporate front and the European Sovereign Debt saga. A bad start on Monday for Wall Street usually does not bode well for equities and certainly will not provide any level of comfort for investors going into today’s trading. The USD continues to find itself well within the strongest parts of its range against the EUR and GBP. The Greenback has also made a potent move against the AUD as of late. Commodity prices – excluding Gold – continue to show that they are under pressure and this highlights that demand for resources remains lackluster. In essence the broad market place continues to be a chess board that matches long term thinking versus short term strategic safe haven moves. Investors have serious questions about structural fiscal policy and how this will affect the prospects for a recovery. The USD is likely to find itself within a range trading mode today.
Written by bforex.com