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Will Better Budget Deficit Help USD?

November 13, 2007 (Last updated on September 17, 2010) by

U.S. dollar started its decline against other majors almost with the beginning of today’s Asian trading session. EUR/USD broke through 1.4600 level but fell from it several times. Overall trading day for EUR/USD can be described as the “highly volatile correction”.

The only important (to Forex market) economical data from U.S. today is Federal budget deficit figures by U.S. Treasury. It came out better expected — lower by almost 4 billion dollars than consensus number, landing at -$55.5B. It is a good result, considering September $111.5B budget surplus, but it is worse than previous October -$49.3B.

Budget results report’s effect on currency market will be mostly determined by traders’ reaction; positive or negative, it will depend on their own interpretation of the budget deficit influence on the FOMC’s decisions.

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