SubscribeDaily Futures Commentary November 5, 2009
Thursday, November 5, 2009
The U.S. Dollar is trading higher this morning after yesterday’s volatile day and today’s Bank of England and European Central Bank Policy meetings. The lack of follow-through to the upside following yesterday’s sell-off has to be of some concern to the short Dollar traders.
On Wednesday, the Fed basically handed aggressive Dollar bears a thirty day pass when it decided to remain committed to its low interest rate policy for an “extended period” of time. This should open up the door for greater demand for higher yielding assets, but so far traders have not reacted this way.
The key to surviving current market conditions is to be able to separate economic news from trading activity. While the Fed news on paper is bearish the Dollar, traders will still be looking for value and good risk/reward opportunities. This may be why there has been no followthrough to the upside overnight in the major currency pairs. Another reason could be the European Central Bank and Bank of England policy meetings this morning.
Yesterday the Fed acknowledged the recovery has …
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