I just don’t understand the market, usually when good reports come out, USD falls because people turn their interest to riskier assets. Also when the USD rises, stock falls, vice versa. What has been going on in the market previous days were not usual, stocks rose along side with USD and good NFP pushed the USD higher. Not only that, as far as I have understand and please correct me if I’m wrong, after the beloved bernanke gave his warning that the latest NFP number wasn’t really giving recovery sign and that employment is yet to return in strength, the USD was pulled down, shouldn’t it be rising? shouldn’t traders be flocking to the greenback if bernanke gives a warning of weakness in employment? the reaction seems to me like the market is going crazy.
The dollar rose on Friday because folks started thinking the good news meant Fed rate hikes sooner than previously thought. On Monday Bernanke basically disavowed them of that belief.
Seems the NFP was strong enough to do it’s damage regardless of what bernake said, most major pairs are sitting at >7 day lows along with gold - should we be expecting a ‘correction’?
Are you sure? I think I am actually thinking of something different than Waverider. When I saw the news that the unemployment figures weren’t as bad as expected BBC News - US unemployment rate eases to 10%, I figured it was the main driving force behind USD/JPY rallying at 12/3/09 14:00 GMT and then the huge one at 12/4/09 14:00. Was it?
I’m 100% sure the market could care less about Obama’s green jobs plan because for right now it’s only an idea, and on top of that the forex market isn’t going to concern itself much with industry specific developments as it works on the broad macro scale.
Friday"s non-farm jobs figure definitely boosted the dollar last Friday, as I noted above, because it got folks thinking of earlier rate hikes.
I think it has something to do with the happenings in Obama’s government. And also do not forget the situation in some US states that are buried in snow. The stocks also fall little by little in the Obama administration.
USA will start with monetary tightening as soon as the economy starts to recover, also the world is now viewing that there are problems in europe with some countries that have a high level of debt.