Forex Update 14 September 2012

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Financial Spreads: Spread Betting and CFD Trading

Forex Trading: 14 September 2012

In forex trading, the euro gained sharply after the Federal Open Market Committee decided to start buying mortgage debt until the job market improves.

The fact that Bernanke did not mention an upper limit may imply that the Fed expects to see tough times ahead. However, it also demonstrates that they are willing to do whatever it takes to support growth and push unemployment down.

All in all, this hurt the US dollar and so the EUR/USD pair surged 87 points higher to $1.2985.

Forex Trading: 13 September 2012

Those European governments that are engulfed in huge debts enjoyed a sigh of relief yesterday, as Germany smoothed the way for the creation of the European Stability Mechanism.

The ball is now in the Fed's court, as Bernanke and Co have to decide whether to use further quantitative easing to reinvigorate the US economy.

Either way, the euro/dollar pair continued to rise, seeing a 4 month intraday high of $1.2937, and closing 48 points up for the day at $1.2898.

Forex Trading: 12 September 2012

Ahead of Germany's Constitutional Court ruling on the ESM, the euro jumped 95 points yesterday, closing at $1.2851. This came as currency investors appeared to be more confident about a solution to the debt problems.

However, with the ECB already announcing plans to buy unlimited bonds, the markets also expect the Fed to do its fair share and at least hint QE3.

Assuming that Germany gives the green light, any reluctance from the Fed could bring trouble.

Forex Trading: 11 September 2012

Yesterday, FX account holders took some profits off the table after Friday's rally, sending the euro 48 points lower to $1.2757.

This came as optimism over the ECB's plan to buy unlimited government bonds was replaced with plenty of uncertainty.

It is difficult to predict the implications of Thursday's FOMC meeting and tomorrow's German court ruling. Therefore, many financial spread trading investors have decided to go back to the waiting game, taking events one at a time.

Nevertheless, the confirmation that the German ruling will take place tomorrow has attracted a few more buyers, pushing EUR/USD back to the $1.2800 level this morning.

The bulls will now be eying up the next resistance levels seen at $1.2830 and $1.2875.

Forex Trading: 10 September 2012

The euro posted a sharp rise on Friday, largely on speculation that the Fed will follow the ECB and act to kick-start the sluggish economy.

The trigger was the weaker-than-expected NFP numbers, as Ben Bernanke has previously expressed 'grave' concerns about the employment sector.

As a result, the EUR/USD pair rallied 184 points to $1.2815; not so much on a stronger euro, but on expectations of another round of dollar devaluation.

This morning, the FX spread trading markets are fairly calm, with the EUR/USD market currently at $1.2790.

Forex Trading: 07 September 2012

The unveiling of the ECB's unlimited bond purchasing plan gave investors a good enough reason to buy the euro yesterday, despite plenty of unanswered questions and few details.

As a result, the EUR/USD forex pair rose by 30 points to $1.2632, with an intraday high of $1.2652, last seen in early July.

Today's US Non-Farms report will undoubtedly be the main attraction, with officials fighting desperately to reduce that lingering high jobless rate.

Forex Trading: 06 September 2012

Speculation that the European Central Bank will announce plans to purchase unlimited 3 year government bonds offered the shared currency some support yesterday.

However, the limited rise of 35 points, to $1.2602, could also suggest that such a plan by itself would not be enough.

As always, the devil will be in the detail. CFD trading investors will be keen to find out the whole arrangement, after growing tired of generic promises.

This morning, the euro is trading at $1.2605 and is within touching distance of a two month high.

Forex Trading: 05 September 2012

In forex spread trading, the US dollar saw rising safe haven demand yesterday as the global manufacturing picture continued to deteriorate.

China, Europe and now the US are struggling, fuelling worries that the world could slip back into recession.

Nonetheless, the drop of just 19 points for the euro/dollar pair, reaching $1.2566, suggests that investors hope Draghi will actually deliver on his intention to start buying government bonds and save the euro.

Forex Trading: 04 September 2012

Yesterday, the European Central Bank President Mario Draghi suggested that he is in favour of buying government bonds on the secondary market. This saw the euro/dollar FX futures trading market rise by 20 points to $1.2587.

However, investors will be closely watching the ECB's interest rate decision on Thursday for any extra clues about their next course of action.

Forex Trading: 03 September 2012

In the forex markets, the US dollar was hurt by Ben Bernanke's comments that he stands ready to use extra monetary easing if the jobless rate continues to remain elevated.

Although it was not a clear signal of QE3, investors took it as 'good enough for now' and exited the US currency, pushing the euro/dollar market 70 points lower to close at $1.2576.

Looking ahead, Friday's Non-Farm Payrolls report will undoubtedly be this week's focus point, as well as the ECB meeting.

By Simon Denham, 14 September 2012

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