Defiantly ignoring the negative prognostications of the vast majority of currency strategists and commentators, the dollar has recorded a modest appreciation of 1.5% since the Fed announced unbounded QE four weeks ago. Numerous explanations help to account for the surprise rise in the greenback – the economy has been stronger than expected, the jobs environment looks perkier as many major American retailers announce plans to hire thousands of temporary workers, Europe and Asia still look vulnerable and risk appetite has been somewhat defensive. Also, a number of major American companies have been repatriating ahead of fiscal year-end and traders are very short dollars, expecting the greenback to struggle as the year-end fiscal cliff approaches. The dollar index achieved a four-week high today and now looks poised to test resistance up around 80.80 in the short term. Right now, it probably pays not to underestimate the buck.
Daily Forex Brief
Making cents of the dollar
Wed, Oct 10 2012, 11:48 GMT
by
Michael Derks
|
FxPro
Michael Derks
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Michael joined FxPro in May 2010 having been previously at Deutsche Bank, Rothschild and Schroders. He is a multi-discipline investment and market strategist/economist with extensive expertise in FX, strategic and tactical asset allocation, fixed income, equities, property and alternative assets.
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