Today’s Forex Analysis summary.
The Euro was under pressure all day as traders were reluctant to hold on to long positions ahead of this week�s central bank meeting. Much of the selling pressure was related to concerns over the Euro Zone economy and the upcoming actions by the European Central Bank later this week.
U.K. traders came back from holiday and were able to hold the British Pound higher. Investors are still looking for reasons to buy the Pound other than just a weaker U.S. Dollar. I don�t know why the Pound would be appreciating other than speculation that the U.K. economy was going to rebound or just spread adjustments because of the holiday.
The Canadian Dollar took its cues from the equity markets today. A weak stock market kept downside pressure on the Canadian Dollar most of the day by giving long traders an excuse to take profits.
Trading was choppy in the Japanese all day. Traders can�t seem to make up their minds because of the two-sided trade in the stock market and optimistic testimony by Fed Chairman Bernanke. The lack of fresh economic news today is also giving the USD JPY a reason to trade in a tight range.
The stronger U.S. Dollar kept pressure on the Swiss Franc throughout the day. News that Swiss bank UBS posted a loss had little effect on this market because traders are now looking forward to better times instead of to the past.
The Reserve Bank of Australia left its benchmark interest rate unchanged on Tuesday. This is a clear sign that the interest rate cutting cycle may be ending.
The NZD USD piggy-backed the rally in the Australian Dollar in the hopes of catching some of the optimism developing in that market. Although New Zealand and Australia share a similar relationship with China as a trading partner, their economies are not quite at the same level.
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