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Originally Posted by bana17a
I was wondering that too. Normally USD does react accordingly to major econ news but for this morning. the dollar gained on all pound, euro, & the franc. Please help to clear this up. if the news doesn't necessarily have anything to do with how market moves then why market it moved so violently when the news came out. Please bear with me, i'm a newbie so i can't see things from all angles just yet. Thanks
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There is only one reason why prices move - because the balance of sellers and buyers shifts in the favor of one or the other, creating the need for price to find a new level at which is comes into balance once more. If the numbers didn't generate more USD selling interest, or decrease buying interest, then the USD wasn't going to fall.
Now think about why that might be. Could it be because the sellers had already sold?
The thing that new traders fail to understand is that the market is not moving on present conditions for the most part. You've no doubt heard that the stock market discounts future events. That means the market is looking ahead to what is to come and pricing based on that. The forex market does the same, though perhaps to a lesser degree since there is a large amount of trade and capital flows going on in present terms that has nothing to do with speculation.
That's why the same news events can have complete different market responses based on what the market thinks of the future. If it doesn't change the market's perceptions, prices aren't going to move - at least in a sustained fashion.