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Forex weekly update
A very exciting week!
Fri, Jul 4 2008, 14:36 GMT
by Omar Arnaout
This has been a very exciting week on financial markets, with lots of significant macroeconomic data being published; most importantly the always awaited payrolls and the ECB’s decision with regard to interest rates. The week started of slowly with a minor increase on the EURUSD market, which additionally grew in strength after the publishing of the ADP nonfarm employment change which presented a decrease of 79,000 work places against an expected decrease by 20,000. This negative data drove investors, to some extent, to believe that Thursdays payrolls may also be worst than expected and that the EURUSD, after breaking the level of 1.5841, would surge towards the previous record of 1.6018. This scenario did not take place as the ECB increased rates by 25 basis points to the level of 4.25%, whilst the awaited payrolls presented a decrease in work places by 62,000 against an expected decrease by 60, 000. Though data seemed to favor the strengthening of the Euro against the US Dollar, the EURUSD plummeted by more than 150 pips falling to the boarders of the level of 1.57. This could only be explained by the fact that, after observing the ADP nonfarm employment change investors were positively surprised by the payrolls reading which gave the US Dollar an impulse to grow in strength. Maybe if the ECB surprised investors and increased rates by 50 basis points, then we would not have experienced such a situation.
I believe that if the EURUSD market does not bounce back to the increase trend at the beginning of the next week than we could be expecting the fall to the boarders of 1.53.
Published on Fri, Jul 4 2008, 14:37 GMT
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