Bearish Dollar Sentiment Calls for Risk Aversion!

The effect in the market is still locked and the sentiment of a weak dollar dominates the movement of currencies. Even with the release of inflationary and confidence data from the initiator of all problems, the US, trading remains of low volume as the trend continues sideways. Credit woes have yet to disappear resulting in diminishing the risk appetites of investors as they flee from the currency and stock markets after reporting losses to enter commodity markets pushing prices of crude to pass the $142 per barrel level.

The 15 nation currency is still showing no specific trend since the morning after gaining yesterday versus the dollar. Inflation in Germany inched higher to 3.3 percent in the year ending June from 3.0 percent while CPI EU-harmonized was also in at 3.4 percent. ECB President has already signaled a rate hike hopefully in the upcoming meeting yet again, as the sentiment in the market has not been changed; little movement was evident as the Euro still records a high of 1.5782 after recording a low of 1.5719. Trading currently is at the 1.5750s.

The Sterling pound was testing the 1.9900 resistance level yet failed to breach it taking the currency back down to 1.9870s currently. After soaring yesterday against the dollar and following the same footsteps of the Euro, it was trading pretty much within narrow ranges at the Bollinger band limits between 1.9890s and 1.9850s.

As for the Yen being the star in the forex market, risk aversion and investors risk appetite was able to help the yen gain against majors in the markets as investors were unwinding their carry trades taking the USD/JPY pair down to the 106.20s as the dollar continues to lose ground. Against the Euro, the yen gained from a record low at 169.45 to continue dragging the pair down to the current support level at 167.12 while the GBP/JPY is currently at 211.10s

Crown Forex

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