The currency market is focusing on U.S. short-term Interest Rates as talk of a rate increase by the Federal Reserve has emerged. Dealers said that market participants will focus on a slew of Treasuries auctions this week. If longer-term Treasury yields rise on supply worries, this could weigh on the U.S dollar. and that might be difficult for the USD to climb further only on U.S. positive jobs data. Last Friday’s surprising Non-Farm Employment Change report helped to generate a fantastic reversal for USD pairs and crosses. Regaining much of what it had lost in the previous 2 weeks, the greenback rallied Friday and breached a number of significant support and resistance levels. The EUR/USD traded over 1.4200 by mid-day Friday, yet currently trades under 1.4000. The GBP/USD temporarily spiked above 1.6200 only to fall back towards 1.5950 by today’s early trading session. These currency pairs only demonstrate a small sampling of the movement which the Dollar witnessed in late-afternoon trading on Friday. Perusing through today’s market movements it seems as though last Friday’s employment reports will continue to drive market optimism in the US economy. Therefore, traders can expect USD pairs and crosses to continue their reversal, or level-off at the very least. So far, in today’s early trading hours, the greenback has appeared to stabilize and float in neutral territory against most of its currency counterparts. With hardly any news coming from the United States, this isn’t likely to change today. Looking ahead this week, there isn’t much economic news expected which will impact the Dollar like last week’s data releases. Traders will likely see a continuation of recent trends primarily due to the lack of economically impacting data from world markets. Significant to bear in mind, however, is the upcoming G8 summit this coming weekend. While it is not an official regulating body, it is an official meeting between finance chiefs and central bankers at the highest levels who will meet to discuss recent issues facing the global economic community. As a result, it may carry an impact on the future movement of the major world currencies; like the USD.
Massive Greenback Reversal in the Works - Will it Hold?
Source: www.forextvblog.com
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