hi. I have a question.
we’ve been noticing several bullish reports for the USD recently.
I’m wondering how many of these it takes for the USD to make a reversal after many weeks of weakening.
does anyone have an anwer?
Interest rates is the name of the game when it comes to currencies.
The US is expected to cut rates early next year.
The EU, UK, and Japan are expected to raise rates.
This is why the USD has been falling.
Unless these expectations change - meaning no rate cuts for US or no more rate hikes from the others - the dollar will keep falling.
I see.
well the question still remains, just rephrased.
what (and how many) positive reports would change the rate cut decision\expectation?
i mean, are we anywhere near that? or would it take at least a month of bullish reports, for example?
You can’t really put a set number on it. What you should do is go back and find data results for the past few months and look at what sectors are keeping the economy afloat and which sectors are weak.
We all know housing sucks. If housing all of a sudden started to grow again, this would boost the dollar expecations alot.
On the flip side, consumer spending and the labor market have been keeping the US economy going. If these were to start crumbling, the dollar would also take another nose dive.
The USD sell off was expected to continue, but surprising US economic data early in the week boosted the US currency. USD selling has stopped since then in advance of key inflation data, and risks are seen towards a strong inflation number which will continue to support the US dollar near term.
What you have been seeing, traders close out positions ahead of friday wild move. Many Euro longs are out and waiting a weak inflation report to get in again.
But I see risk towards a stronger US dollar in near term, but that may not prove lasting long time.
This is one of the things I am waiting for… I do hope there is a reversal somehow, because of mainly personal reasons not related with my investments, but learning how to predict is taking me so much time, that I feel like I should just wait and see what happens. Right now I had to trade into EUR and I lost some money, but it was inevtable! On the other hand I am learning a lot in this site, and I hope things will get better for me!