The New Zealand dollar pared gains from the previous week as investors continued to curb their appetite for risk, and the higher-yielding currency may face increased selling pressures over the coming week as demands for carry trades deteriorate.
The Canadian Dollar would steadily fall throughout the week as weak fundamental data and declining commodity prices lowered growth expectations for the economy. Weak domestic data had a significant hand in the currency?s fall as manufacturing activity fell to its lowest level on record on the back of plunging inventory and prices.
The Swiss franc strengthened this week to pick up 200+ points against the U.S. dollar amid the dismal GDP release however, investors are likely to turn over their positions next week as the Swiss National Bank is widely expected to lower the 3-month target LIBOR rate by 50bp to 0.50%.
The British pound has been acting tipsy just above its precarious support level at 1.45 against the US dollar. Data this past week was heavy hitting, but no surprises were generated from its collective impact.
It?s difficult to assign the US dollar a bullish fundamental bias considering the acceleration of the economy?s recession and the fact that American markets are the epicenter to a global financial crisis; but regular economics do not apply in times like these.
Despite a week of significant event risk the Euro ended the week relatively unchanged as it traded in a narrow 300 pip range. The lack of volatility was surprising considering the fact that the ECB cut interest rates by 75 bps, which was the biggest since the single currency was instituted.
US Recession Deepening, How Long Can Dollar Strength Hold Up? Euro May Remain Range Bound As Rate Cut Fails To Spark Volatility Japanese Yen Threatened by Year-End Capital Flows Pound Threatens Six Year Lows As UK Recession Paces Global Decline Swiss Franc To Fall Further as Investors Raise Bets For SNB Rate Cut Canadian Dollar May Break Support On BoC Rate Cut Australian Dollar Trading to Follow Global Stock Performance New Zealand Dollar Under Pressure As RBNZ Hints At Further Rate Cuts
The Japanese Yen could reverse recent gains next week as seasonal capital flows create the perception of a boost to risk appetite.
Australian dollar price action was restricted to a clearly defined trading range last week despite a heavy dose of economic event risk.
For those traders looking for volatility into the end of the week they would have found it in USDCAD.
on Your First Move For Tuesday January 27th
