Daily Forex Analysis by Finexo.com 12/01/2010


After a weekend in which traders and analysts digested the disappointing Non-Farm Payroll data, the US Dollar fell across the board on Monday in the first full session since the report’s release. Not helping the Dollar was a comment by a Federal Reserve board member which confirmed the markets fears in the wake of the reality of a 10.1% unemployment rate. James Bullard, the President of the St. Louis Federal Reserve, said that he believed interest rates will remain at current levels for a while and that it was highly unlikely that any piece of data that will come out between now and the next FOMC meeting in February can influence the Central Bank to raise rates. The market has been hoping for a rate hike as US core lending rates have been stuck at .25%. Conventional wisdom holds that as the prime interest rates rise, the value of a currency follows as there is more income garnered from inter-bank overnight lending.

At 11:00PM GMT, the US Dollar was trading down .62% to the Euro to 1.4518, down .52% against the Japanese Yen to 92.06, down .28% versus the British Pound to 1.6115, down .14% to the Australian Dollar to .9306, down .43% against the New Zealand Dollar to .7429 and up .02% versus the Canadian Dollar to 1.0329.


Philipp Hildebrand, the Swiss National Bank Chairman commented on Monday that the Central Bank would do whatever was necessary to curtail the growth of the Franc against the Euro, stifling an early session rally. The intervention of the Swiss National Bank is worrisome to investors who have seen the Euro slide in recent weeks on new unrelated to its relationship with the Franc. Traders fear that the SNB would go too far in their efforts to control something that is, in effect, uncontrollable.

At 11:15PM GMT, the Swiss Franc was trading down .11% against the Euro to 1.4748, up .3% to the British Pound to 1.6369, rallying back late in the session after having been down against the Sterling most of the day. The Franc was also up a fraction against the Japanese Yen in very choppy and high volume trading to settle in at 90.58 and up .63% versus the US Dollar to 1.0156.

Written by Finexo.com