GBP USD Remains Under Pressure

James Hyerczyk from ForexHound.com at 10/12/09

 

The U.S. Dollar is trading mostly mixed against most currencies. Demand for more risky assets has been the general theme today. Trading has been limited today because of a bank holiday in the U.S.

Investors are also standing aside because of tomorrow’s slew of economic reports. U.S. retail sales will be reported early in the trading session. This report should set the tone for tomorrow.

The Dollar is trading mostly lower versus the major currencies at the midsession. Appetite for more risk is the general theme driving the Dollar lower.

The GBP USD is one of two Forex pairs trading weaker. Traders believe that the economy will remain weak. Investors are looking for interest rates to remain low while the Bank of England continues to apply its aggressive stimulus plan.

Demand for more risky assets is helping to boost the December Euro. Traders believe that the Euro Zone is in a better position to recover from the recession than the U.S. economy.

The December Japanese Yen is trading flat to lower. The Yen opened sharply lower but has since erased most of its losses. Traders are concerned that the Yen may be overbought at current levels and are reluctant to buy strength.

The December Canadian Dollar remains one of the strongest currencies. Last week’s better than expected Canadian unemployment report is helping to provide the support while firm oil and equity prices drive this market higher.

The AUD USD is up on stronger demand for higher yielding assets and speculation that the Reserve Bank of Australia will hike its benchmark interest rate in November.

The NZD USD is trading mixed to lower. Traders are hesitant to buy the New Zealand Dollar because of tonight’s key retail sales report. There is still some concern the New Zealand economy is not quite ready to turn the corner despite the strong rise in the currency.