Archive for September 2011

• US Dollar at Critical Levels Ahead of Nonfarm Payrolls, ECB Decision
• Euro On the Verge of a Massive Tumble as Major Event Risk Rises
• Japanese Yen Outlook Remains Bullish But for Possible Intervention
• Sterling Eyes BoE as Growth Concerns Take Root
• Gold Outlook Remains Bearish On USD Strength
• Canadian Dollar Direction Contingent on Global Growth Outlook
• RBA Rate Decision Could Break the Aussie
• New Zealand Dollar Weakness To Gather Pace On Rate Expectations

Though it was an extremely choppy performance, the dollar did well this past week. The greenback advanced against all its major counterparts with the exception of the British pound despite the lack of a tangible drive in underlying investor sentiment and the necessary liquidity demand that defines the fundamental appeal of an otherwise wayward currency.

In an unexpected burst of momentum in the final hours of trading this past Friday, the euro tumbled to the threshold of major support against its US and British counterparts (two of the currency market’s most liquid pairs). This puts the world’s second most liquid currency at immediate risk of a extraordinary plunge to start the new trading week.

For the second straight week, the Canadian Dollar was one of the worst performing currencies, dropping 2.11 percent against the U.S. Dollar as markets finished their correction that took place at the start of the week. This was expected, as I noted last week that “there could be a small correction in the coming days – typically after such a massive sell-off as we saw the past two days – any rallies should be sold as broader global trends dictate the need for safety, in currencies such as the Japanese Yen or U.S. Dollar.

After posting modest gains at the start of the week, the Australian Dollar finished the week poorly, dropping by 1.20 percent against the U.S. Dollar. The Australian Dollar, as part of the commodity currency block, faced significant headwinds in the latter half of the week; however, this was widely expected, as global growth continues to show signs of weakness and the European sovereign debt situation has squeezed investors out of higher yielding and risky assets.