Forex Fundamental Analysis

The U.S. Dollar suffered sharp losses against the Euro on the first trading day of the third quarter. Reacting negatively to job loss estimates from private-sector payroll firm ADP, the Dollar shed nearly 1% against the EU single currency.

The poor economic news out of the UK will likely continue on into tomorrow with the release of housing and manufacturing data. We also get the same manufacturing data from the US as well as employment data from ADP.

The U.S. Dollar closed the second quarter with gains against the world’s major currencies. Against the Euro, the Dollar improved to € = $1.4032, despite evidence of historically low inflation within the EU bloc. Similarly, the Dollar was able to shrug off worse than anticipated consumer confidence results.

In early trade, the British Pound reached eight-month highs based on market optimism that an end to the recession will occur sooner rather than later. Positive data concerning prices of home sales and consumer confidence in the UK helped drive the Pound as high as $1.67 before backing off somewhat.

The U.S. Dollar declined sharply against major currencies on Friday after a Chinese finance minister was reported to have suggested that China consider alternate benchmark currencies rather than rely on the Dollar for its currency reserves.

U.S. Dollar Trading (USD) in a major change of sentiment the market the downside resistance of multiple currencies over a 24 period. USD was the one of the main gainers losing only to the Yen at the end of the day.

U.S. Dollar Trading (USD) was unable to gain on the increase in risk aversion as multiple factors weighed. Oil jumped as US inventories dropped by 3.9M. US Current Account continued to worsen -101B vs. -85B forecast. US CPI jumped up 0.1% in May. Crude Oil closes down $0.56 to close the day at $71.03.

The USD saw a strong and sustained sell off in the US trading session today, despite equities ending the day overall flat. Oil made a break to $69 but came back to close at just under $71.

The markets are at a pivotal junction at this point in time. The confidence in the global recovery plan seems to be waning, taking the positive market sentiment with it. One of the primary causes to this shift in sentiment is the falling interest in foreign countries purchasing US treasuries.

Today we saw the US equities break beneath the current trading range. However, there was not enough momentum to force the market to continue in this direction, and it still remains above the up trending lows from the upward move that began in the middle of March.

As the broader markets struggle to find a consensus on direction, oil easily gained on the day closing up 85 cents.

The euro fell further against the dollar and the yen in Asia Tuesday as regional stocks declined, prompting hedge funds to keep taking profit on risky currencies including the European unit.

U.S. Dollar Trading (USD) continued where it left off on Friday and gained heavily against most currencies. Stocks were mixed, as were metals with Oil bouncy but copper struggling under heaving profit taking. Markets were quieter than usual with Australia away during the Asian session.

U.S. Dollar Trading (USD) staged a major rally in the face of increased risk aversion as US data prompted USD buying. Risk appetite was left to the USD/JPY which surged nearly 200 pips higher on the back of the Non Farm Payrolls.

The dollar fell slightly against the yen and euro in Tokyo Monday as Asian players sold the U.S. unit to take profits following its rise Friday in New York on a better-than-expected U.S. jobs report.