Improved Non-Farm Payrolls Driving U.S. Dollar Higher
The Euro is rebounding this morning after a sharp sell-off on Wednesday. Pressure was on the single currency yesterday following the confirmation of a technical closing price reversal top the day before. Fundamentally, traders turned bearish on the currency after Moody’s Investors Service downgraded 30 Spanish banks and following the resignation of Portugal’s prime minister.
Interest Rates Driving Euro and British Pound Higher
The surprise this week in the Forex markets is the inability of the U.S. Dollar to attract fresh investors given the escalating problems in the Middle East and North Africa. With crude oil and gold rising as traders take protection, many traders thought the Greenback would benefit from flight-to-safety buying.
Short-Covering Ahead of Fed Minutes Driving Greenback Higher
Appetite for Risk Driving U.S. Equity Markets Higher, T-Bonds Lower
At least for the time being, investor appetite for risk seems to be stronger than the desire for safety, driving up U.S. equity markets ahead of the opening. This morning’s possible rally was tipped off yesterday when all three major futures indices posted daily closing price reversal bottoms.
Weak China Data, Reaction to Fed Move Driving Equities Sharply Lower
In what may be developing into a series of bad reports like the U.S., China reported more economic weakness overnight, triggering rallies in both the Dollar and the Japanese Yen. The moves into these so-called “safer currencies” suggests that investors are turning risk averse once again, leading to tremendous sell-offs in risky assets.
Flight-to-Safety Driving Dollar, Yen Higher; U.K. Lowers Growth
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.
European Strength Driving U.S. Futures Markets Higher
Investor sentiment is up this morning, driving U.S. stock index futures higher in the wake of strong earnings results from European banking giants UBS and Deutsche Bank. Investors are also buying in anticipation of strong earnings results from Aetna, Inc., Anadarko Petroleum Corp., DuPont and Lockheed although banking stocks are expected to carry the market today.