January 6, 2012
Who’s the king of the forex hills? That’s right, the Greenback is! The dollar showed the markets who’s boss yesterday after it gained sharply against its major counterparts on risk aversion and strong U.S. reports. EUR/USD plunged by as much as 119 pips, while USD/CHF shot up to close 111 pips higher than its open price. Booyah!
I could tell you about concerns in the euro zone and how the latest bond auctions gave the region’s investors more worries, but I’ll just tell you about the other factor why the dollar strengthened so much yesterday.
Why, it’s the employment-related reports, of course! The Challenger report on planned job cuts started the day on a positive note by printing at its lowest levels since June last year. Not only that, the ADP report also clocked in at 325,000 in December, which is A LOT better than the 176,000 figure that many were expecting.
Then, the initial jobless claims report also showed an improvement, dropping by 15,000 from its revised 387,000 number. The ISM services PMI disappointed expectations though, with its 52.6 reading against expectations of 53.00. Still, it was a bit better than November’s 52.0 figure, so I guess the investors didn’t feel too bad about it.
For today the NFP report and the U.S. unemployment rate are due at 1:30 pm GMT. For the newbies who just started trading forex, you should know that these reports are one of the closely watched, if not the most closely watched reports in across markets because of their significance on the world’s biggest economy.
Good luck trading the NFP, brothas!
Last edited by PipDiddy; 01-06-2012 at 02:38 AM.
"The only cable I watch is the pound baby."