SubscribeDaily Futures Commentary April 20, 2009
Monday, April 20, 2009
The strong surge in the equity markets over the past few days has some people thinking that the global economy is bottoming and setting up for a recovery, but foreign currency traders must be looking at another set of fundamentals.
Last week the U.S. Dollar gained substantially over its foreign counterparts and the reason for the gain was not the strong U.S. economy but rather the not-so-weak U.S. economy. Last week saw reports which showed the U.S. economy still in a weak position.
The action in the foreign currency markets suggests that although the U.S. economy is still showing signs of weakness, conditions may even be worsening in Europe and Asia. The weakness in Asia was led by the lower than expected GDP number out of China. The cause of the lower number was a decline in exports. If the U.S. economy doesn’t get better then China’s economy is likely to continue to contract.
The Euro Zone continues to show signs of a contraction in the economy. News that inflation is dropping is causing traders to believe that the worst is yet to come. The …
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