U.S. Dollar Gets Boost from Flight-to-Safety Buying
Flight-to-safety buying could be the theme today if conditions continue to escalate in the Middle East, particularly Libya. Overnight the U.S. Dollar moved higher against most major currencies as turmoil in Libya triggered a surge in oil prices. Traders took protection by dumping risky assets and moving money into the Greenback.
Crude Oil Gets Boost from Weaker Dollar, Inventories Decline
Aussie Dollar Traders Waiting for Bullish News from RBA
The AUD USD closed higher for the week, but the pace of the rally was slowed by the rangebound trade in the U.S. equity markets. Some traders also feel the Aussie Dollar is overbought in the short-run while others believe that the expected 25 basis point hike in the benchmark interest rate by the Reserve Bank of Australia is already priced in. The RBA meets on October 5.
Japanese Intervention Plan Getting No Support from Central Banks
The USD JPY hit a key 50% price at 80.40 as forecast, triggering some light profit-taking. Although traders anticipate another round of intervention, there has been no notable central bank activity at this time. This could mean that aggressive traders will continue to push the Dollar/Yen lower into the next retracement level at 80.04.
Traders Seek Direction from Bernanke, GDP on Friday
December Gold soared to the upside on Thursday following a sharp break in U.S. equity markets. Traders increased their long hedges in gold on the stock market weakness. As mentioned several times the past few weeks, gold (hard asset) and stocks (paper) are competing for the same investment Dollar. Gold has had a tendency to rally lately following sell-offs in the stock market.
Investors Shying Away from U.S. Dollar in Wake of Economic Concerns
Demand for Risk Helps Equity Markets Recover from Wednesday’s Decline
Trichet Softens Concerns about Stress Tests; Euro Takes Direction from U.S. Equities
The Euro rallied early, traded in a range then made a move to the upside in a lifeless trade on Thursday. Volume appeared to drop off throughout the day following the European Central Bank’s policy statement announcement shortly before the start of the New York session. For the most part, the Euro seemed to be taking its direction from the U.S. equity markets.