dollar

The U.S. Dollar is trading flat to lower at the mid-session as traders remain cautious ahead of Friday’s U.S. Non-Farm Payrolls Report. Earlier this morning the Dollar showed little reaction to the European Central Bank’s decision to hold interest rates steady and a slight drop in U.S. Weekly Initial Claims.

The U.S. Dollar is strengthening this morning after the Bank of Japan decided to invoke an emergency easing plan. The BoJ avoided an intervention but instead decided to provide liquidity in an attempt to weaken its currency. The plan includes expanding its current 20 trillion Yen quantitative easing program to six-months from its current three-month time frame.

The Dollar is trading mixed at the mid-session. The lack of any fresh economic news is encouraging investors to seek direction from the equity markets. It seems the only market moving with any conviction is the British Pound.

The weaker Dollar and struggling equity markets helped trigger an early session rally in December Gold. After finally breaking through a key 50% level at $1215.00 last week, gold has been underpinned by expectations of a weakening equity market. This morning, buyers drove the market into the next upside objective at $1228.00 before light profit-taking pushed it back a couple of bucks.

The USD JPY is trading higher at the mid-session, putting it in a position to close higher for the week. A close above last week’s low at 85.48 will produce a weekly closing price reversal. This formation, once confirmed by a follow-through rally next week, often leads to the start of a 2 to 3 week retracement to a major 50% level, currently identified as 89.55.

The Greenback is up against the commodity-linked currencies, extending it winning streak versus the Australian and New Zealand Dollars. Fears of a global economic slowdown fueled by this morning’s unexpected rise in unemployment claims, pressured equities which helped curtail investor demand for risky assets.

All of the commodity-linked currencies were down hard on Wednesday. The Australian Dollar was down the most because of its strong link to China. Downside momentum is building in this market which could trigger a test of the last main bottom at .8904. Ultimately, this market seems destined to test a major 50% price level at .8644.

The British Pound is down over 1% at the mid-session as worries about a slowdown in the economy are forcing investors to wonder if the U.K. economic recovery is slowing down.

U.S. stocks are down at the mid-session as concerns about a worldwide economic slowdown are driving down demand for higher risk assets.

The U.S. Dollar is trading sharply lower against most major currencies with the exception of the Japanese Yen. Investor sentiment has shifted away from risk leading to weakness in the commodity-linked currencies. A reduction in the outlook for U.K. GDP is leading to a huge sell-off in the British Pound.

The news that the Fed is going to let the economy work its way through the slow down helped equity markets regain some of its earlier losses.

The Fed’s decision to shift buying interest out of mortgages and into Treasury Bonds is helping September T-Bonds and T-notes to rally to new near term highs.

The Federal Open Market Committee left interest rates unchanged as expected as well as a majority of its policy statement from previous sessions.

The Dollar fell and stocks rose as the Fed kept its balance sheet intact while changing the composition of said balance sheet by moving out of mortgages and into long-term Treasuries.

Investors have been selling risk this morning ahead of the Fed’s Federal Open Market Committee monetary policy decision. The selling actually began overnight and continued into the day session as investors slashed risky positions.

Investors have been selling risk this morning ahead of the Fed’s Federal Open Market Committee monetary policy decision. The selling actually began overnight and continued into the day session as investors slashed risky positions.

The lack of fresh economic news and tomorrow’s Federal Open Market Committee meeting have kept investors on the sidelines today, causing sideways trading.

The bias has been to the upside in the stock indices but there has been very little commitment in terms of size. Individual stocks are driving the indices higher rather than economic news.