European and US Share Prices Rise

The dollar’s rally ended on Wednesday as investors took advantage of forex opportunities provided by the news that both European and US share prices rose broadly. The return to risk appetite is providing many new forex investment opportunities globally. The news that banking giant Citigroup was profitable in January and February sent share prices up and signaled a return of risk appetite which traditionally means more forex opportunity for investors.

Emerging Currencies Doing Well

Emerging currencies provided new forex opportunities for investors. Some economists expect emerging economies to outperform both European and US economies in 2009. The Hungarian Florint and the Polish Zloty rose on currency exchanges and provided forex opportunity to savvy investors. The Florint rose 1.1% against the dollar while the Zloty rose 0.60%.

Euro Rises Against Dollar

Even the troubled Euro rose to a two week high against the dollar and forex brokers were quick to take advantage of the rise. Omer Esiner of Ruesch International stated, “We’re seeing a general rebound in risk appetite given improving stock performance.” The Citigroup memo assuaged fears about the health of the banking sector, undermining the dollar’s safe-haven appeal.´

Many Expect Rally to be Short Lived

Although some forex brokers expected the bounce to be short lived. Aside from the CitiGroup news economic data from Europe, the US, and Japan continues to show a deepening recession. Some forex brokers pointed out that the US government is preparing a fourth contingency plan for CitiGroup. Adam Fazio of CIBC World Markets stated, “The government wouldn’t be putting a fourth plan in place if it didn’t think there was some chance that it would be needed.”

Pound Up Against the Dollar

Even the beleaguered Pound managed to rise 0.7% against the Dollar to $1.3864. The rise is expected to be short lived since Lloyds Banking Group announced that the British government will own 77% of the bank raising fears about the banking sector. The return of risk appetite is providing increased forex investment opportunities. How long this will last is anybody’s guess.