FXstreet.com

Daily Analysis

9

0

The Dollar advances as global stocks fall and investors look for safety

Fri, Nov 20 2009, 08:20 GMT
by Benny Menashe

Finotec Group Inc.


EUR/USDUSD/JPYGBP/USDUSD/CHF
1.5017(M)90.25(M)1.6879(M)1.0278(S)
Resistance1.5000(M)89.83(M)1.6845(M)1.0235(M)
1.4935(M)89.43(M)1.6725(M)1.0208(M)
1.4845(M)88.49(M)1.6574(S)1.0085(M)
Support1.4808(M)88.35(M)1.6515(M)1.0030(S)
1.4780(M)88.01(M)1.6467(M)1.0015(M)

The greenback climbed against the euro as stock markets fell, discouraging demand for higher yielding assets. “The market is very nervous, and there are not a lot of risk takers right now,” said Sebastien Galy, a strategist at BNP Paribas SA in New York. “There’s one big trade, the dollar short trade, and people are feeling increasingly nervous about it.” A short is a bet for a currency to fall. The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, advanced 0.2 percent to 75.327. It touched 74.678, the lowest level since August 2008, on speculation the Federal Reserve will trail other central banks in increasing borrowing costs. The EUR/USD is currently trading at $1.4920 as of 21:16pm, GMT with a bearish trend.

Sterling slipped on Thursday as UK borrowing data underlined Britain's deteriorating finances, while a selloff in high-risk currencies also kept the pound under pressure. Also hitting sterling was data showing Britain's public finances deteriorated at a much sharper pace than expected last month, taking public borrowing as a share of GDP to its highest on record. That data took the shine off a rise in retail sales. Ratings agencies have said the UK may face a possible cut in its sovereign rating if its fiscal position worsens. This would likely tarnish the appeal of UK government debt and prompt investors to pull funds out of the country, hurting sterling. Analysts said the data highlighted the need for the UK to rein in borrowing or face the possibility of a ratings downgrade. Such measures, coupled with ongoing low interest rates would keep sterling weak in the mid to longer term. The GBP/USD is currently trading at $1.6660 as of 21:40pm, GMT with a bearish trend.

U.K. house prices will probably fall next year, and it may take until 2014 to return to the levels at the 2007 peak of the country’s biggest housing boom, according to a Bloomberg survey. For all of 2009, the average home will probably increase about 5 percent in value, to almost 161,000 pounds ($270,000), said Martin Gahbauer, chief economist of Nationwide Building Society, the U.K.’s largest customer-owned mortgage lender. Martin Ellis, chief economist of Halifax, Britain’s biggest provider of home loans, expects prices to be little changed. U.K. residential real estate had almost tripled in value during the decade before the credit crunch. The gains encouraged more Britons to pour borrowed money into homes and more “buy- to-let” investors to acquire property for rental income.

Pie


Today's Economic Events

Time Event Currency/Country Period Previous Forecast Significance Actual
6:00PPI (M-o-M)GermanyMonthly-0.52
6:00PPI (Y-o-Y)GermanyYearly-7.6-7.52
6:00Convenience Store Sales (Y-o-Y)JapanYearly-5.63
4:00Interest Rate DecisionJapan0.10.1020.10
1:00Credit Card Spending (Y-o-Y)New ZealandYearly-2.33


Finotec  | Global financial trading center, 1 Grivas Digheni and Chrysanthou, 3035 Mylona P.O.B 58007, Limassol
http://www.finotec.com/ | support@finotec.com

Legal disclaimer and risk disclosure

FINOTEC Trading’s Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.

Related reports

Intraday Forex Technical Report - U.S. Update: More dollar corrections by FXstreet.com Independent Analyst Team
Fri, Nov 20 2009, 16:15 GMT

Weekly Market Commentary - The trend to lower interest rates continues by Mizuho Corporate Bank
Fri, Nov 20 2009, 15:48 GMT

Daily Market Report - There are indications that the market is reducing its exposure to risk by Wells Fargo Investments, LLC
Fri, Nov 20 2009, 15:19 GMT

Fundamental Currencies Comments - Dollar climbs vs. majors by ecPulse.com
Fri, Nov 20 2009, 15:15 GMT

Currency Majors Technical Perspective by FXstreet.com Independent Analyst Team
Fri, Nov 20 2009, 14:22 GMT

eurusd, gbpusd, usdchf, stocks, usdjpy

View All

Related content

Wall Street ends Friday in negative; Dollar with gains
FXstreet.com | Fri, Nov 20 2009, 22:14 GMT

Forex: EUR/USD ends week with moderate losses
FXstreet.com | Fri, Nov 20 2009, 21:27 GMT

ForexLive New York wrap-up: EUR/USD bounces after 1.4800 attack
Forex Live | Fri, Nov 20 2009, 20:58 GMT

Forex: GBP/USD fails to hold above 1.6500
FXstreet.com | Fri, Nov 20 2009, 20:35 GMT

Forex: EUR/USD rebounds at 1.4875 and falls to 1.4835
FXstreet.com | Fri, Nov 20 2009, 18:33 GMT

eurusd, gbpusd, usdchf, stocks, usdjpy

View All

Interested in forex trading? forex brokerage firms!


MG Financial Group
Contact the broker/FDM
Open a demo account
FX Solutions LLC
Contact the broker/FDM
Open a demo account
City Credit Capital (UK) Limited
Contact the broker/FDM
Open a demo account
MIG INVESTMENTS SA
Contact the broker/FDM
Open a demo account
Deutsche Bank
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.