Risk appetite has put itself in full view in recent days and on Tuesday the USD was confronted and it lost ground to both the EUR and GBP. Wall Street turned in a good performance with solid gains across the major indexes. What is interesting about these results are that they are coming with a rather mixed bag of economic data serving as the backdrop. The Empire State Manufacturing Index was released yesterday and it came in with a slightly improved number compared to the previous month with an outcome of 19.6. However, the result did not meet the estimate of 20.1. Today Building Permits, Housing Starts, and Industrial Production data will all be published. The anticipated numbers today are calling for slight improvements from the Building Permits and Industrial Production statistics and investors will have yet another dose of ‘facts on the ground’ to judge their prevailing sentiment.
The USD has continued to move towards the weaker side of its strong trend and traders participating in this swing of momentum have had a good ride. The question that must be asked taking into consideration the amount of negative storm clouds circulating above the market, is if a thunderclap will cause those with increased risk appetite to run for cover quickly or will they display enough courage to stay their ground? Today’s data could create a certain amount of nervousness if the reports turn in poor outcomes and underscore the recent negative spate of less than promising economic statistics. However, it does appear that traders have decided to enter the waters in mass the past few days and are attempting to swim with the sharks. The USD has found a difficult road the past few sessions and traders will have to remain aware of all obstacles.
Written by bforex.com