New York Trading Session Recaps from Forex.com research Desk:October 1, 2007 6:42 PM
Published: October 1, 2007 6:42 PM
Despite the dreadful news of a large U.S. Bank warning their third quarter losses were down a dismal sixty percent, the Dow Jones Industrial Average soared to new all-time highs well above 14,000. The dollar strengthened against its major counterparts as profit taking in Euro into the 1.4275/80 highs from Friday has blocked this pairís attempts higher for now. GBP/USD also retreated off its 2.0490/95 highs as a couple of UK macro hedge funds drove this pair lower, lightening up their longs into the much anticipated European Central Bank (ECB) and Bank of England (BOE) interest rate decisions later in the week. The Reserve Bank of Australia (RBA) will also be releasing its rate decision tomorrow night at 7:30pm ET. Most believe that the RBA will remain on hold but the rhetoric will be crucial to the continuation of the current trend or a failure near these multi-year highs.
Overnight the US dollar managed to fend off the positive Japanese business confidence release (Tankan report) that unexpectedly held near a two year high of 23 when the median of economists were looking for it to fall towards 21. USD/JPY gained about one hundred points from the Fridayís close and at one point took a peak at the stop losses that were building above 116.10/15 to add to the gains, but to no avail as the same profit taking from the day trading community capped this pairís rise.
Traders are now looking at pending home sales tomorrow and the release of Non-Farm payrolls report on Friday for further direction in the US dollar near term.