Why dollar is weak?

[virmon]

The US dollar has recovered on the heels of stronger economic data. The Empire State manufacturing survey jumped almost 23 points in March while foreign purchases of US securities increased more than expected in February. Although some economists argue that one month of stronger manufacturing data does not equal a recovery, the market is nonetheless pleased to see the weaker US dollar finally lead to some positives for the US economy.

[JEAN]

The dollar is losing ground against the majors after the publication of some US macro data. Even though the initial jobless claims were worse than expected, the production price index beat expectations. As a result, there is a rise of risk aversion.

[andy003]

The greenback showed signs of stabilizing in the spring and summer. Massive dollar purchases by Japan and other Asian central banks, hopes that the U.S. trade deficit was peaking, and expectations that the Federal Reserve would hike interest rates rapidly all combined to put a floor under the U.S. currency.

[andy003]

The world financial system is in a tremendously doubtful mode at the moment, irresolute between the hope and optimism that the global financial system may be over the most horrible and the information that "bear market rallies in a recession are the rule not the exception".

[Pinalli]

I think because the US should have expected this, they are 12 Trillion Dollars in the hole and are only worth 14 trillion annually – a number that is certain to decline this year as a result of the slowdown. Being that there are only 800 Billion actual dollars in circulation (not including the fake ones that North Korea has been printing), this puts the US in a position similar to Rome eighteen hundred years ago – a dominant power in the world that those in need turn to for help yet on the inside, they are collapsing financially and are actually the ones in dire need of help.

[JEAN]

Focus today will be on whether the dollar can break out of it’s current ranges especially against the Euro. The balance between the continued risk aversion regarding the GM debacle, North Korea will go head with the continued will for the market at large to recover rapidly from the gallows of this economic recession..


RESISTANCES &SUPPORTS:
EURUSD GBPUSD USDJPY USDCHF
1.3939 1.6087 99.59 1.0953
1.3900 1.5975 97.85 1.0923
1.3881 1.5952 97.04 1.0894
1.3875 1.5922 92.92 1.0882
1.3840 1.5900 96.63 1.0873
1.3819 1.5856 96.14 1.0853
1.3740 1.5780 95.92 1.0812
S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot

[Pinalli]

Moody’s, one of the major credit rating agencies affirmed the Dollars “AAA” status “despite rising national debt” on Wednesday, sending the Dollar higher against most majors as credit worries eased. Also, on Wednesday, a regional Federal Reserve president had said that the Chinese informed him they were “concerned” over the US’s rising debt in a meeting held last week. Richard Fisher of the Dallas Federal Reserve in Texas said the primary concern of the Chinese is the Federal Reserve, the US’s Central Bank, financing spending by the treasury department which essentially amounts to printing money. While China is worried about hyperinflation, analysts agree that at this time the US economy is slightly deflated.

However, data released late in the session in online forex market showed that the inventory of unsold homes had increased in the US, stoking fears that home prices will continue to fall next month. The news dropped the dollar off of its highs and moved it negative against the Sterling.

[JEAN]

The USD continues to come under broad based selling with no respite in sight. Commodities and commodity currency rallied on renewed risk appetite with the audusd climbing above 0.7950 level and the gbpusd broke through 1.6100.

[Pinalli]

Originally Posted by JEAN

The USD continues to come under broad based selling with no respite in sight. Commodities and commodity currency rallied on renewed risk appetite with the audusd climbing above 0.7950 level and the gbpusd broke through 1.6100.

The Dollar continued its slide from late last week on Monday as broad gains in the global stock markets reduced the safe-haven appeal of the greenback and signaled a return of risk appetite. The Dollar fell to its lowest level of the years against the Euro as well as a broad basket of currencies. Manufacturing data in the US posted its highest gain in nine months and construction spending rose for the first time in eight months giving investors and traders solace that the US economy might be stabilizing.

[JEAN]

EURUSD reverted the gains after the Payrolls, as the US unemployment rate came out worse than expected..