Dollar Falls Slightly
The U
S dollar fell slightly against the Euro and the Japanese Yen due to an ease in risk aversion spurred by the news that the US government plans to inject $20 billion in capital to rescue the troubled Citigroup bank. European and US stock markets reported gains signaling risk appetite which could further weaken the dollar. The dollar remains a safe haven for risk adverse investors and provides plenty of Forex opportunity.
Citigroup Bailout Welcomed by Investors
While many investors remained cautious because of global recession fears, the news of the Citigroup bailout was welcomed by investors seeking more Forex opportunities. Dustin Reid, director of Forex strategy at RBS Global Banking & Markets in Chicago stated, “The forex market continues to be all about risk appetite and its proxy, equities.â€
He also stated that the rescue plan, “Clearly sends a signal that some of the U.S. banks, in the government’s view, are too big and important to fail. The move should also help to calm overall market sentiment for the very short-term.”
In morning trading in New York, the euro was up 1.4 percent against the dollar at $1.2758 EUR, while it also rose 1.2 percent to 122.12 yen EUR/JPY. The dollar slipped 0.2 percent to 95.70 yen, while the British Pound followed the rising direction of UK share prices and rose 0.7 percent to $1.5005.
Geithner Named Treasury Secretary
US stocks experienced rising demand but the dollar has been falling following the news Timothy Geithner will be named by U.S. President-Elect Barack Obama as Treasury secretary. Obama is expected to officially name Geithner as Treasury Secretary at a news conference scheduled for noon today. (Monday, Nov, 24, 2008) Geithner had previously been president of the Federal Reserve Bank of New York.
German Economic Figures Grim
In Europe the economic climate remains gloomy. In Germany the Munich-based IFO economic research institute said its business climate index declined to 85.8 in November from 90.2 in October, it’
s lowest since February 1993. The German economy is the largest in the Eurozone and weak economic figures could signal further rate cuts.
The Forex market continues to offer investors Forex opportunities that stock and commodity markets cannot match at the present time. The Forex market has not experienced the volatility of stock markets and all indicators point to plenty of Forex opportunity in the near future.
