Daily Archives: December 30, 2010
The foreign exchange markets have been relatively quiet over the last week, as typically thin volumes of currency are moved over the festive period.
Today we have no data of note from the UK or Europe so focus is firmly on the US where we have jobless claims at 13:30 and pending home sales at 15:00. Jobless claims are expected to show a fall in new claimants but a rise in ongoing unemployed. Any difference from expectations could cause some volatility in the market. For homes sales, expectations are unfavourable for the dollar with a big fall from 10.4% to 2.0%.
As the dollar is the world’s reserve currency significant volatility for the greenback can cause movement in other currencies. For example, bad data today for the US could lead to dollar weakness and subsequently Swiss Franc strength. The CHF has made big gains during 2010 as it is currently being viewed as a safe haven by currency investors who would usually favour the US Dollar. We could also see movement away from euros and into dollars if there is some unexpected positive data form the US.
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