USD/JPY The main reasons and prediction for US Dollar volatilities according to the news updates by FINEXO.……

Friday, July 25, 2008

The main reason for US Dollar volatilities in the next week according to the news updates by FINEXO are.……

1. The continued drop in oil prices added up to $20 from the all-time peak of $147 hit on July 11. Furthermore, President George W. Bush threatened to veto a bill meant to salvage the housing market. These factors contributed to the reinforcement of the dollar.

2. The dollar received further support from the president of the Philadelphia Federal Reserve Charles Plosser who stated that the Fed might have no choice but to raise interest rates to counteract inflation. According to senior traders, this reflects that market sentiment is now inclined to dollar buying.

3. The fact that the dollar managed to hold its position after breaking the 200 day moving average against the yen was considered a great supportive factor by analysts who stated that if the dollar manages to break the 108.59 barrier of mid June, it could reach up to 110.00 yen.

4. Furthermore, U.S. Treasury Secretary Hank Paulson emphasized the importance of a strong dollar. These statements provoked speculation among traders, and reinforced the dollar. Yet analysts explain that these statements represent the minority's opinion, as the rest Fed members give a higher priority to ending the credit crisis first.

5. According to analysts, the dollar broke through some key levels and has upside momentum; however Japanese exporter selling could emerge at these levels and further weaken the dollar.

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EUR/USD – Euro Falls Following the Raise in Interest Rates

Saturday, July 5, 2008

In a press conference held by the European Central Bank President Jean-Claude Trichet, the highly anticipated rise in interest rates to 4.25% was revealed, the first rise since June of last year. He added that the current interest rates will contribute in achieving price stability in the region.

Analyst believe that this statement means that only the next set of economic data will determine the possibility of further interest rate rises, which are not expected anytime soon.

This increase follows the release of data showing that the European inflation had reached 4%, a 9-year high, doubling the inflation rate the ECB had planned to keep when the euro was first launched in 1992.

The euro stood at $1.5890 before the Trichet's statement, which brought about a fall of 0.5%, leaving the euro at $1.5803.



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