Dollar Rallies Last Week
The US dollar ended last week with a rally that provided forex opportunity for many investors. There were several reasons cited for the dollar’s strong performance. Many traders and investors are wondering if the dollar will provide the same forex opportunities as it did last week.
Remarks by German Finance Minister Put Pressure on Euro
Several factors contributed to the dollars rally. Remarks by the German Finance Minister about fiscal responsibility put pressure on the Euro. Investors were relieved to hear that replacing the US dollar as a reserve currency would not be a topic at the upcoming G 20 summit. The Japanese fiscal year ends March 31st and Japanese traders are purchasing Yen and selling other major currencies.
ECB Meets This Week
This week brings three key events that could affect markets and the forex opportunity they provide. The European Central Bank is expected to announce rate decisions which are bound to affect the Euro. Besides rate cuts investors will be watching to see what other actions the ECB plans to take addressing the recession in the Euro Zone. If the ECB indicates it is willing to adopt Quantitative Easing the sale of Euros could benefit the dollar and provide many with forex investment opportunities.
G 20 Summit This Week
The G 20 summit begins Thursday and is bound to have a profound effect on markets and forex opportunities. Although no significant decisions are expected China is seen as a wild card at the conference.
US Non Farm Payrolls Due This Week
US non Farm Payrolls are expected Friday and will show that an additional 656,000 Americans lost jobs in March. Traditionally this report determines risk appetite or aversion to some extent. If investors become skittish the increase in risk aversion is sure to benefit the dollar.
Quick Forex Tip: Political conditions play a major role in global currency trading. Political instability can cause a currency to lose value. Recently political problems and deficit concerns in Greece caused the euro to fall in global currency trading centers. Market psychology although difficult to define can also affect market perceptions and can either help or pressure currencies.
