Buoyed by overnight and early morning gains, the U.S. Dollar was able to maintain an upward bias throughout the New York trading session. See-saw trading in the U.S. equity markets also helped to quell demand for higher risk assets.
Buoyed by overnight and early morning gains, the U.S. Dollar was able to maintain an upward bias throughout the New York trading session. See-saw trading in the U.S. equity markets also helped to quell demand for higher risk assets. As we go to print, however, strength is beginning to build in the Dow and NASDAQ markets which is helping to put downside pressure on the Dollar at the mid-session.
The biggest change this morning was in the USD JPY which completely reversed a weak opening. Overnight events in Jakarta and concerns over the possible bankruptcy filing by the CIT Group led a flight-to-safety rally in the Japanese Yen overnight, but the inability to follow-through to the downside in the USD JPY and U.S. equity markets triggered a short-covering rally in the Dollar versus the Yen.
Sideways action in the equity markets and a firmer trade in crude oil are forcing a two-sided trade in the Canadian Dollar. It looks as if the USD CAD will gain into the close if the equity markets weaken the rest of the afternoon.
Downside pressure is on the Australian and New Zealand Dollars as demand for these higher yielding assets has diminished after strong gains earlier in the weak. The weakness experienced today is not threatening a change in trend, but is indicating that buyers are not interested in adding to winning positions at current price levels.
EUR USD traders are treading water today. Mixed signals about the U.S. and Euro Zone economies are encouraging selling today. The chart formation is helping to create a bearish scenario. The inability to break out over a key retracement zone is leading traders to believe that this market has to go much lower to attract fresh buyers.