November 10, 2009
The USD got off on the wrong foot yesterday, as it stumbled around in yesterday’s dance-off. The USD got left behind by all other major currencies, as traders danced to beat of “Sell the USD”!
Risk appetite ran rampant in yesterday’s trading session, as traders were more than happy to partake in some risk taking. It appears that the markets reacted favorably to the G20 statement that revealed that G20 nations would continue to provide more stimulus. The report also showed that finance leaders were not too concerned about current currency levels. This prompted a dollar sell-off. If G20 nations are promising to keep rates low and to keep providing stimulus, shouldn’t this mean a run back to risk aversion? Hmmm… It seems that the markets are really looking at fundamentals right now. If so, we could see dollar weakness for quite awhile…
Later today at 3:00 pm GMT, the IBD/ TIPP economic optimism index will be available. The index surveys consumers on current economic conditions, measuring consumer confidence using a score of 50 as the base that separates optimism from pessimism. It is projected to have a reading of 50.3, up from October’s release of 48.7.
Also, FOMC members will be speaking throughout the day. They may drop hints about current monetary policy, as well as the direction that the FOMC will be taking in terms of when to unwind economic stimulus. Just be careful as any slip up may cause a strong market reaction.
Tomorrow is Veteran’s Day in the US. People will be honoring those who have served in the US military, so we could see less liquidity in the markets.
"The only cable I watch is the pound baby."