* Dollar Pressing Forward on its Biggest Monthly Drop In Over a Decade
* Euro: Relief is Not Optimism and a Rough Plan is Not Comprehensive
* Australian Dollar Posting its Biggest Rally Since its Float
* British Pound Rallies as European Troubles Ease, Growth and Stimulus Still Issues
* Japanese Yen: So Much for the BoJ Forcing a Reversal with Policy
* Canadian Dollar Finding Unlimited Dovish, Bearish Forgiveness
* Gold Rallies for a Fifth Day, Though Pace Falls Short of August Terminal Thrust
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Written by: John Kicklighter, Senior Currency Strategist
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| Dollar Pressing Forward on its Biggest Monthly Drop In Over a Decade |
It may seem a little early to start analysis on a monthly scale (the last trading day for October isn't until Monday); but the progress that the capital and FX markets have made this month so far warrants our early attention. If there were a fundamental theme to come out of this market-wide move it would easily trace back to risk appetite trends (the road almost always does). Though there is a critical lack for return in the forecast; that doesn't negate the climb in speculative assets that can catch a bid as the other side of the balance tips - a reduction in risk. And, that is exactly what we have found in the less-than-comprehensive plan for the European Union. Taking a direct cue from this fundamental development, we note that EURUSD has advanced 5.9 percent since the month began (the biggest run since September 2010). However, there is enough uncertainty lingering for the euro to mute this particular pair's performance. If we truly want to appreciate the dollar's poor health; we should refer to the Dow Jones FXCM Dollar Index (an equal weighted composite of the four most liquid pairs). It has plunged 5.2 percent so far this month (the biggest drop on records going back to 1999) following a 5.8 percent rally in September (the biggest rally on record)...
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Best regards,
DailyFX Research Team
research@dailyfx.com |
20:16
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