FXstreet.com

Daily FX Commentary

This report has been deactivated

0

0

Daily FX Commentary

Wed, Nov 26 2008, 14:53 GMT

Investica Ltd


Dollar outlook darkens

The Euro weakened back towards the 1.28 level in early US trading on Tuesday, but then secured renewed gains with a move to above 1.30 for the first time in three weeks as there was a reduction in underlying dollar demand.

The Federal Reserve announced a further US$800bn support package for financial markets and the economy. In particular, the authorities want to narrow mortgage credit spreads which would lower interest rates and help underpin the housing sector. In this context, the Fed will buy US$600bn in mortgage-backed securities and spend a further US$200bn on supporting credit facilities in consumer-related sectors such as autos and student loans.

The action will maintain some degree of optimism over measures to support the economy and equity markets remained firm. There will, however, be serious longer-term fears over the budget outlook and a huge expansion of the Fed’s balance sheet will pose major risks to economic and currency stability.

Third-quarter US GDP was revised to show an annualised contraction of 0.5% from the previous -0.3% estimate as household spending fell sharply. The Case-Shiller house-price index also recorded a 17.4% decline in the year to September. The latest consumer confidence data was stronger than expected with a recovery to 44 in November from a revised 38.8 the previous month as energy prices fell sharply, although this is still at a historically depressed level.


Archive

Investica Ltd http://www.investica.co.uk | tim.clayton@investica.co.uk

Legal disclaimer and risk disclosure

Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.

Related reports

US: employment, not as bad as it looks by Danske Bank A/S
Fri, Nov 6 2009, 18:50 GMT

FX View - Headline unemployment rate creates dollar shocker by Interactive Brokers LLC
Fri, Nov 6 2009, 18:41 GMT

Forex Daily Overview - USD mixed, unemployment rises to 10.2% by Easy Forex
Fri, Nov 6 2009, 18:31 GMT

Weekly Market Commentary - Fed, BOE and ECB kept rates on hold by Mizuho Corporate Bank
Fri, Nov 6 2009, 15:45 GMT

US Employment: Skills and Policy Issues—Beyond Stimulus by Wells Fargo Investments, LLC
Fri, Nov 6 2009, 15:25 GMT

fed, eurusd, us, rescue, tarp

View All

Related content


Interested in forex trading? forex brokerage firms!


ACM Advanced Currency Markets SA
Contact the broker/FDM
Open a demo account
FOREX.com
Contact the broker/FDM
Open a demo account
GFT
Contact the broker/FDM
Open a demo account
CitiFX Pro
Contact the broker/FDM
Open a demo account
Alpari (UK) Limited
Contact the broker/FDM
Open a demo account

GET CASH BACK FOR YOUR TRADES!   Learn more about the Pip Rebate Program

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.

Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

©2009 "FXstreet.com. The Forex Market" All Rights Reserved.