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26 December Forex daily review

Sergiy Zlyvko
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Thursday was a holiday in New Zealand, Switzerland, United Kingdom, Canada and the Eurozone. On the occasion of national holidays financial markets in these countries remained closed Wednesday. With the opening of the foreign exchange market, market participants had negative attitude to the U.S. dollar. They did not aggressively sell the U.S. dollar, but for those who have a dollar remained open long positions, causing tension.

Since during the day the news did not publish in Europe, the European session the euro bought in anticipation of higher U.S. stock indices. The euro/dollar rose to 1.3700. Pound/dollar rate grew to 1.6380.

Boosted optimism in the stock market contribute to the recent positive economic data in the U.S. This is actually strange. After all 2013 stocks rose on the Fed because of weak statistics on postponed QE3 program folding. When the Fed cut the monthly purchase at $10 billion, the stock market ignored their decision. When the output is weak stock performance grew that the Fed does not turn off QE3. Now Christmas rally on the stock market continues because the release of positive statistics and positive impact on the economy and stocks of U.S. companies. How many will rally in the stock market run, no one can predict. We are waiting for the first serious fixing, after which it will be possible to calculate the correction target.

On Wednesday, the exchanges were closed on Christmas Day. Yesterday, Dow Jones Industrial Average index and S&P 500 ended the trading session again at record highs. Dow Jones industrial average jumped by 122.33 points or 0.75% and closed at 16479.88. Dow rose to an intraday high of 16,483, while the S&P 500 reached a record high – 1 842.84. Report on the U.S. labor market was a driver of asset’s purachases.

Number of initial applications for unemployment benefits last week fell by 42 thousand to 338,000 (forecast was 345 thousand). The number of calls dropped more than expected last week, thus confirming that the Fed will continue to reduce the amount of bonds redemption amid improved economic performance. Dollar ignores positive news and today in trading in Asia greatly weakened against its competitors. Pound against the dollar has appreciated by 30 points to 1.6445. Euro against the dollar has appreciated by 50 basis points to 1.3745.

The overall picture of the market emerges against the U.S. dollar and given that the holidays low-liquid market, up to 1 January 2014 in the forex market can be surges 1.5 figure in any direction aa for the dollar and against it.

We can say that the euro stood yesterday at about 1.3700. Today in Asia the peace was disturbed, the EURUSD rose to 1.3745. Market ignores statistics from the U.S. and looks at the dynamics of stock indices, which are updated every day time highs.

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