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Trading Currency - A Summary

Forex Markets − Afternoon Report

Mon, Sep 14 2009, 16:05 GMT
by Anna Coulling

Master The Markets  |  View company's profile

Forex Markets Today

The dollar is recovering Monday from a sharp sell off against the euro and yen from last week, after the euro finally broke out of a four month range against the dollar in the previous trading sessions, with many forex traders now suggesting that the dollar is due for a correction. Still, it remains within those weaker ranges despite being slightly up on the day. Over the weekend, Washington imposed stiff tariffs on Chinese made tires, and in retaliation China said it would launch an anti dumping investigation into U.S sales of chicken and auto products.

The risk of protectionist policies, when economies have yet to fully recover from financial crisis, leaves commodity exporters and small open economies particularly vulnerable, as their currencies are the same that garnered support in the recent bout of risk appetite against the dollar, and in particular the Canadian dollar, Australian dollar, Swedish krone and Korean won would be principle examples. The euro traded at USD1.4558 versus the dollar in recent action, down from USD1.4587 in North American trading late Friday. Rising risk appetite last week helped push the euro to a new high for the year above USD1.46. The British pound changed hands at USD1.6553, down from USD1.6685.

Forex Markets Outlook Today

The dollar could see additional support towards the end of September as the Group of 20 summit of the largest economies approaches. Several attendees are scheduled to speak in the coming days. Some wonder whether leaders might talk about the strain a weak dollar presents their economies. EURGBP retains a firm underlying tone. More demand now expected at the 1500GMT London fix. Reported offers placed between stg0.8800/05 have so far capped topside at stg0.8803. A break of stg0.8810 to open a move on toward stg0.8825/30. Rate currently trades around stg0.8800.

The euro vs yen recovery off overnight lows at JPY131.30 extends to JPY132.45 into early NY trade, with offers ahead of JPY132.50 providing a hurdle to further upside progress. Rate currently trades back around JPY132.25. Above JPY132.50 to open a move toward JPY132.80/00. Support now seen around JPY132.00, a break below to allow for a deeper move toward JPY131.70 ahead of JPY131.30, with bids noted from this latter level, extending toward JPY131.00.

Published on  Mon, Sep 14 2009, 16:06 GMT

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