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Blogs about basic information in forex trading, forex participants and how to earn big in forex trading.Word this morning out of the Euro zone is that a deal has been brokered to help Greece get its budget deficit under control.  However, the devil is in the details, as they say, and as of right now—no details of the plan have been released!  So while there is an official resolution, no one [...]


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Word this morning out of the Euro zone is that a deal has been brokered to help Greece get its budget deficit under control.  However, the devil is in the details, as they say, and as of right now—no details of the plan have been released!  So while there is an official resolution, no one is certain of what exactly it is.  But something is better than nothing, though the market may not necessarily agree.
In other news, employment reports in both Australia and the US have lifted the markets as risk-taking is the flavor of the day.
More specifically for the currencies:
Aussie (AUD):  Good news out of Australia in the overnight session as the unemployment rate fell to 5.3%, showing signs of economic strength.  As a result, the Aussie is up 1.12% vs. the Yen and 1.05% vs. the Dollar.  Australia gained three times as many jobs as had been forecast which is positive for not only Australian but global growth.
Kiwi (NZD):   The Kiwi is higher this morning on risk-taking however they just reported their housing figures a day early, apparently by mistake as it was due to be released tomorrow.  The data showed that housing sales fell 17% from December, in a sign that a slower housing market may curtail consumer spending and thus economic growth.  These numbers are not official yet.
Loonie (CAD):  The Loonie is higher this morning on commodity prices and general risk-taking.  There is no new due out of Canada for the rest of the week so expect the Loonie to trade on risk themes.
Euro (EUR):  While the news out of the Euro zone is positive in that Greece won’t be allowed to default, this is seen as Euro negative by the forex market.  The Euro is down across the board this morning, as the Greek bailout is seen as “sapping confidence in the region and ‘permanently’ increasing the risk of holding the single currency”, according to Goldman Sachs which cut its forecast.
Pound (GBP):  The pound is down against the commodity currencies as “no news is good news” for the UK.  The market is digesting the reports out of the UK from yesterday and the Pound is trading accordingly in the risk hierarchy.
Dollar (USD):   The Dollar is down against the commodity currencies and news this morning that Initial Jobless Claims are down is contributing to the general risk-taking mood.  However, the stock market futures are giving back some gains from pre-market and the Dollar has been gaining back ground.  Whether or not today will remain a risk-taking day remains to be seen.  There is a lot of news on tap for tomorrow so we may see a rebound in dollar strength.
Yen (JPY):  The yen is showing strength against the Dollar but is down against the commodity currencies as risk-taking is still in effect.  News out of China that property prices have climbed the most in 21 months as banks extended more credit ahead of potential tightening monetary policy has helped the Yen’s position this morning.
As you can see, seemingly positive news is not always what it’s cracked up to be.  That’s why it’s extremely important to understand the inter-relationships between the currency pairs.
Overnight, the Asian markets were higher and currently in Europe only the FTSE is higher, as both the DAX and CAC 40 are down on the Euro zone news.  US market futures are down, and oil and gold are up slightly.
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