* Dollar Slows its Descent, Faces Critical Point for Next Phase
* Euro Faces Spain and Bank Downgrades, Slovakia Vote and More but Volatility Anemic
* British Pound Advance Stalls as Risk, Gilt Yields Hit Ceiling
* Australian Dollar Defers to Risk Rather than Follow through on Employment Rally
* Japanese Yen Unfazed by BoJ's Warning for More Stimulus
* Canadian Dollar Finds Little Encouragement from Trade Data, Oil
* Gold Trading Volume Pulls back to Levels Last Seen in July
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Written by: John Kicklighter, Senior Currency Strategist
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| Dollar Slows its Descent, Faces Critical Point for Next Phase |
| Confidence in the market is completely absent. Rather than seeing the balance in sentiment tip from risk appetite to risk aversion; we see that there simply isn't conviction in any single bearing for capital placement. This lack of interest will almost always leave the greenback sidelined. When uncertainty overtakes the markets, investors will either park their funds in assets with tolerable yield while avoiding exceptional risks. The greenback simply does not fall within these bounds - rather it is on the extreme end of the safe haven spectrum. For the currency itself, we can see this negative trait play out in price action. For the Dow Jones FXCM Dollar Index (ticker = USDollar), we have seen an eight-consecutive day decline (open to close). We have only seen a loss of this magnitude twice in the recent history (the period through December 31st, 2010 and May 13th, 2009). Alone, that would be an extremely bearish signal; but against the backdrop of measured participation, this reads as a trend that could quickly correct its course... |
Best regards,
DailyFX Research Team
research@dailyfx.com |
19:51
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