With little in the way of data and only existing sentiment to trade on the USD moved to the stronger realms of its value on Friday against the EUR and GBP. Wall Street continued to turn in lackluster results and the greenback seemingly found safe haven backing before going into the weekend. The question hovering over investors internationally is what the impact from another economic downturn in the U.S. will cause. It is one thing to say that American consumers will further restrict their spending, but another unknown calculation is what would become of the tax bases that governments worldwide rely on to maintain their debt. Today will be a quiet day of releases from the States, but tomorrow the Existing Home Sales will be published and on Wednesday New Home Sales figures will come forth.
Entering the final two weeks of summer before the Labor Day holiday in the U.S., investors have proven rather unconvinced about brighter prospects for the economy. Wall Street has basically stumbled since the spring and it results last week will provide no comfort. Election season is also another important ingredient that will have to be watched the next few months until November. The possibility of the White House losing its mandate could certainly prove to be an incredibly important part of investing. Thus, with the speculation that prospects will be tone downed from the corporate front and the inclination that third quarter results are going to show a struggle, investors cannot be faulted for pursuing a cautious trading mode that includes a safe haven philosophy. Trading volumes remain low and ranges will certainly continue to be tested short term, but the midterm prospects for the USD remain stable to good depending on the currency pair.
Written by bforex.com