Forex Notes

Forex: A Farewell Glance At Friday

On Friday, the euro reached a new level of 9-month low against the dollar after it became clear that the agreement reached yesterday to help Greece lacked detail, and China has unexpectedly tightened monetary policies that discourage investors' willingness to take risks.

Decision of the Central Bank of China tightened banks' reserve requirements have a negative impact on the draft to take risks, because it could hurt economic growth. Dollar Index reached a 7-month high, the Australian dollar came under strong pressure against major currencies.

Yesterday's decision by Greece, adopted at the EU summit, the players considered too vague, so that the yield spreads between bonds of Greece and Germany widened.
"The situation in Greece is still putting pressure on the euro. Markets were hoping to get more information on the plan of salvation, and received little," said Camilla Sutton, a representative of Scotia Capital.
She also noted that the decision of the Central Bank of China, "has reduced the craving for risk" and an influx of capital into the U.S. dollar.

The next step is to resolve the problems of Greece will meet the EU finance ministers earlier in the week, though analysts said that perhaps it was too early to expect full clarity on future actions to block aid to Athens.

Today's European performance only added fuel to the fire: Eurozone GDP grew by only 0.1% in the 4 th quarter, assuming that the economic recovery a little goes flat against the backdrop of slowing growth in Germany, the largest economic bloc.

As for the American session, she has developed quite muddled.
The favorable performance of retail sales in the U.S. allowed the dollar to grow to 90.35 against the yen, confirming that the U.S. economic recovery continues.
Soon, however, a sudden drop in the index of consumer sentiment has weakened the buck against the euro and pound, allowing them to win back some heavy losses incurred during the European session, the euro managed to weaken to $ 1.3532.

However, it is difficult to say under the influence of what currencies were moving increasingly - vyvalennyh economic reports today on the U.S. or the positioning of players ahead of long holiday weekend (on Monday the U.S. are celebrating the Day of the President) and the regular meeting of the EU authorities, appointed all the same on Monday.

In light of this potential risk factor, some experts advised players not to leave the market with short positions on the euro / dollar, and closing short positions in thin pre-market triggered the recovery of the euro to $ 1.3635.

However, in general, traders remain negative set against the single currency. Now they say that to sell the euro against the dollar, might be preferable, rather than against other currencies. They also believe that now is a time when "for the euro is not good news" - the stigma, which bore the dollar the last few years.