Skeptics Worried About Being Left Behind

mercaforex

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by Mercaforex

The greenback slid further into a morass against the major currencies on Wednesday. The general feeling within the marketplace at this time is that the trend is hard to ignore even if you disagree with it. The economic data that played into the hands of bulls yesterday were the positive numbers from the Industrial Production and Capacity Utilization statistics, which were both better than expected. The equity markets climbed across the board spurring on the sentiment - if you are not part of the rally on the stock market that you will be left behind. Skeptics remain aplenty among investors about the economic conditions in the U.S. and internationally, but the consensus at this point is that it may be appropriate to be reluctantly long equities and part of the growing tide in risk appetite. The USD has been a direct barometer of risk coming into the market place as it has traded lower.Today the U.S. will release its weekly Unemployment Claims and the figure is expected to be an improvement over the last result. As stated above, there remains a rather critical legion of investors who are seemingly shouting into a black hole trying to warn that not all the road posts are pointing to the land of paradise. Job creation remains a critical lynchpin for a strong recovery. Building Permits and Housing Starts data will also be published today, along with the Philly Fed Manufacturing report and all of these figures are forecasted to show an improvement. With no major economic news on the calendar tomorrow, investors will watch the data for any surprises. The value of the USD is a topic for many investors and its performance has not escaped their notice. Having faced a parade of pressure this week against almost all currencies, the greenback will be put to the test once again.

EUR:The EUR marched to new highs against the weak USD on Wednesday. CPI data from the European Union proved a non event basically matching estimates. Today the broad Trade Balance figures are on schedule and tomorrow the German PPI numbers will be published. The EUR has enjoyed a particular strong surge the past two weeks and the currency shows little sign of relenting in the short term. Though there are many signs that the European economies are under the same assault economically as the U.S. and that the financial institutions of the E.U. are equally perplexed, the EUR continues to hold serve. Perhaps one interesting note about the EUR to consider is what type of affect the strength of the currency is going to have on Germany, which has a large export driven economy. The EUR appears to be under the spell of dollar centric trading and traders may continue to join its fan club.

GBP:Sterling regained its composure one day after the Bank of England threw a curve into the pudding of trading. The GBP gained against the USD and though it didn’t quite push up to its highs from the earlier sessions this week, it did show that there remains a steady group of Sterling backers. The U.K. did release its Claimant Count figures and it came in with a number of 24.4K compared to the expectation of 24.7K. Today the Retail Sales data will be published and an outcome of 0.2% is anticipated. Tomorrow the Public Sector Net Borrowing release is on the calendar. It appears that the negative sentiment that was generated from Mervyn King’s speech on Tuesday has now been digested and traders are being tempted to try and follow what has been an overall strong market for the GBP the past week.

JPY:The JPY picked up ground against the USD on Wednesday. The Bank of Japan issued a statement that it does see the Japanese economy improving but that it remains cautious about the prospects of strong growth because of downside risks. There have been conflicting opinions expressed by Japanese officials regarding their thoughts on the growing strength of the JPY, so the impact from these statements may be muted. Gold continues to give the impression of trading in a volatile manner but compared to its true value, the percent that it is moving is actually tame when this is taken into consideration.
 
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