Forex Bull

Major fundamental themes are evolving for the global markets; and the New Zealand dollar will feel the pressure from two of the most significant of these trends over the coming week.

The Australian dollar dropped over 400 pips on the week as troubles in the U.S. and U.K. banking systems fueled risk aversion and led to the unwinding of the carry trade

The Swiss franc weakened further against the U.S. dollar as the reserve currency continues to reap the benefits from safe haven flows, and is likely to hold its bearish trend against the greenback as risk sentiment continues to drive price action in the forex market.

The market will have to make a critical decision on the primary fundamental function of the US dollar within the next few weeks; and the ultimate verdict could finally put the world?s reserve currency back on pace.

US Dollar Trend Hangs On The Outcome Of 4Q GDP And FOMC Decision Euro Troubled by Talks of Euro Zone Breakdown, Debt Downgrades Japanese Yen Likely to Consolidate Below Monthly Highs This Week British Pound Plummets to 24-Year Lows, Outlook Remains Bleak Swiss Franc To Weaken On Speculation Of Fixed Exchange Rates Canadian Dollar To Fall On Poor US Economic Data, Oil Price Decline Australian Dollar May See Extended Losses On Weak Inflation Data New Zealand Dollar?s Reaction To RBNZ Cut Could Be Complicated

Posted By: Patti Domm More bad earnings news and dismal economic reports could steamroll stocks in the week ahead, but the market may gain some traction if it appears the Obama Administration is making progress with programs to help the economy.

With USDJPY testing thirteen year lows and the Dow pushing 8,000, it was hard to miss the rising sense of risk aversion last week.

The British Pound was by far the worst-performing G10 currency through the past week of trade, as pronounced fears of UK government debt ratings and of domestic financial stability led traders to sell the GBP en masse.

Posted By: Lee Brodie Options traders are placing big bets on gold. Should you do the same?    Read More Topics: Currencies | Gold & Precious Metals | Stock Market | Stock Picks MEDIA: PHOTO Permalink

As usual, the Japanese yen traded in line with shifts in risk appetite over the course of the past week, with widespread losses in the stock markets helping to boost the currency. These correlations are likely to hold in the near-term, while fundamentals shouldn?t play much of a role.