This session, the US Dollar got up off of the mat and dusted itself off after being knocked to the canvas in NY by the one-two punch of rising oil, and unstable US financials. EUR/USD peaked out early in Asia at 4 pips over the 1.4900 big figure, and it was all downhill from there as traders weighed their options and chose the lesser of two evils….the Greenback. The pair eased its way to a session low of 1.4864 before a 10 pip or so rebound at sessions end. On one side we have the Dollar, moored in doubt over the continuing saga of the sickly US financials, and on the other side we have the Euro Zone and Co., weighed down with slowing growth and the specter of rate cuts in the future. Pick a side…..but let it be said that it would seem that the anemic financials and rising oil prices don’t look like they pack the same punch as they did only weeks ago. The Euro did bounce from a six month low of 1.4630 in NY, but many foresaw that the dollar was about due for some profit taking at some point after its recent gains.
USD/JPY helped showcase the dollars resilience, as it too reversed off of session lows of just under 108.40 to top off near 109.08. The pair had exited the session close to the 90 level. The Bank of Japan Monetary Policy Meeting stated the obvious and the markets had no real reaction.
For the most part, the end of the trade week in Asia was calm, and it will be interesting to see if the Dollar can follow through with its gains not only in London, but New York as well. The recent surge in oil due to the rising tensions between Russia and the US (a new colds war?), have pretty much been shrugged off to an extent by the dollar, but it still remains a big player in the game. Keep in mind we have UK GDP and the Euro Zone current Account numbers later in London, and the NY session is free from data. Have a good weekend
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