RSS
Home
The dollar factor interupted today's rally
Print
Email
RSS
Subscribe
Strong dollar
The talk of the trading day today: the jobs report. And, what a glorious jobs report it was! With the rate that the nation is losing jobs nearly cut in half to -247,000 from June's number, and the unemployment rate dropping 0.1% to 9.4%, investors and traders dove into the market with all their clothes on. It was spectacular to watch. The Dow quickly gained at the New York open, reaching as high as +185 by 1pm. But the true story today was the price action on the greenback. Typically when stocks are on the rise the dollar weakens, as investment flows from risk averse destinations and into more risky ones. Alas, today was much different. The dollar strengthened heartily in step with stocks, sending the pound dollar and the euro dollar to new recent lows, and also sending commodities like oil down to close the day down $1.50 to $70.50/barrel.
The strong rally in the dollar was purely economic: as the jobs report signaled the U.S. recovery, it is another signal that the Fed will surely need to begin raising interest rates again, and soon. Interest rate hikes are pro-currency, and traders and analysts have been eager to learn when and who will begin raising rates first. Many expect the U.S. to come out of the downturn quicker than other developed nations. Next week we will learn the Fed's interest rate decision, and even more importantly, the accompanying statement which may clarify when they plan to begin raising rates.
| What economic data moves markets the most? |
| How forex analysis can predict the end of the recession |
| 5 crucial elements that signal the economic recovery |
Related Articles:
Add a Comment
.jpg)
