Well now the US makes another strange move, instead of creating jobs, they created more money. In a report by Forex Traders; - "The U.S. Dollar’s weak performance last week came after the U.S. Federal Reserve announced on November 3rd that they would leave the Federal Funds Rate at ‹0.25% and the new QE II stimulus package would consist of a $600B buyback of U.S. Treasury securities by the end of 2011."
So whats that mean to us mere mortals:
After last week’s dismal performance, the U.S. Dollar may be ready to continue its downtrend against most of the other major currencies, and even some of the minors, with the possible exception of the Japanese Yen.
Nevertheless, some caution in shorting the US Dollar this week is advised, mainly because of the increasingly oversold condition of the U.S. currency against the other majors that may prompt a corrective pullback.
In addition to the technicals indicating a possible bounce for the Greenback, the U.S. economy seems to be showing some fundamental improvement in key sectors such as manufacturing and employment.
The gains in these fundamental indicators may signal a favorable turn in the U.S. economic picture which will likely be reflected in gains for the U.S. currency against other major currencies over time.
Going forward, the market will now be watching Wednesday’s U.S. Trade Balance and the upcoming G-20 meetings in Seoul, South Korea just before next weekend to get a better sense of the direction of the U.S. Dollar.
On Thursday, after the US Federal Reserve announced buyback of treasury bills worth 800 billion dollars as an incentive for the country's slow economic growth, market prices of gold futures started growing. A weaker dollar inevitably triggers an appreciation of gold, traditionally viewed as an alternative and more reliable asset, and, at the same time, reduces dollar-denominated commodity prices as compared to other currencies.
For example, in response to the weakened dollar December gold futures on New York Mercantile Exchange sky-rocketed by 3.4% (to $1,383.10 per Troy ounce).
According to analysts, the gold market currently demonstrates an uptrend
On Thursday, after the US Federal Reserve announced buyback of treasury bills worth 800 bn. dollars as an incentive for the country's slow economic growth, market prices of gold futures started growing. A weaker dollar inevitably triggers an appreciation of gold, traditionally viewed as an alternative and more reliable asset, and, at the same time, reduces dollar-denominated commodity prices as compared to other currencies.
For example, in response to the weakened dollar December gold futures on New York Mercantile Exchange sky-rocketed by 3.4% (to $1,383.10 per Troy ounce).
On Thursday, after the US Federal Reserve announced buyback of treasury bills worth 800 bn. dollars as an incentive for the country's slow economic growth, market prices of gold futures started growing. A weaker dollar inevitably triggers an appreciation of gold, traditionally viewed as an alternative and more reliable asset, and, at the same time, reduces dollar-denominated commodity prices as compared to other currencies.
For example, in response to the weakened dollar December gold futures on New York Mercantile Exchange sky-rocketed by 3.4% (to $1,383.10 per Troy ounce).
and look what gold did:Interesting!
