The U.S. Dollar is enjoying a strong overnight move ahead of this week’s Federal Reserve FOMC meeting and the G-20 summit. Traders will be watching the Fed to see if they announce an end to stimulus programs.
The U.S. Dollar is enjoying a strong overnight move ahead of this week’s Federal Reserve FOMC meeting and the G-20 summit. Traders will be watching the Fed to see if they announce an end to stimulus programs. The G-20 members may discuss reducing the U.S. Dollar’s role as the world’s premier reserve currency.
The EUR USD is trading weaker on reduced demand for higher yielding assets. Based on the chart pattern, expect the up trend to remain intact while this currency pair goes into a consolidation mode.
Weakness continues in the GBP USD on concerns that a banking crisis may be developing at Lloyds Banking Plc. Traders are expressing their feelings by dumping British Pounds. The chart pattern suggests that last month’s low may be violated. This could accelerate the move to the downside.
Weaker equity and oil markets are pressuring the Canadian Dollar. In addition, oversold conditions and short-covering should give the USD CAD a boost. Less demand for higher risk assets are also contributing to the weakness in the Canadian Dollar.
Last week’s closing price reversal bottom in the USD JPY was confirmed overnight. Fundamentally, it looks as if the Japanese economy is not strong enough to support the Yen at such lofty levels. The Japanese Finance Minister also believes that exchange rates should reflect the economy. The chart pattern suggests a move to 93.95 is likely.
Lower demand for higher yielding assets is putting pressure on the higher yielding AUD USD and NZD USD. Look for a sizeable break to the downside if the U.S. equity markets expand their overnight losses.