Yen Remains Near Record Highs Versus the US Dollar
The euro and dollar looked to extend gains against the Swiss franc as investors remained cautious about potential Swiss National Bank (SNB) action to slow the pace of the franc’s rise.
Both the euro and dollar racked up gains of roughly seven percent. In a forex trading guide, the SNB said it could peg the franc against the euro, propelling both currencies to their best one-day gains ever.
The approval by the Italian cabinet of the country’s austerity plan did contribute to bids in the euro as well. In day trading, the single currency rose as much as 2 percent versus the Swiss franc in recent trading activity.
As the market digested the possibility of a currency peg in the Swiss franc, most market participants have expressed doubts about its viability. A peg, essentially placing a ceiling on the franc, could open the SNB to unlimited selling in the Swiss currency and reserve accumulation and analysts considered the move unlikely for now. Traders have cited speculation that the euro/Swiss peg could be fixed at 1.15 francs.
Meanwhile, in forex spread trading, the yen hovered in a tight range near a record high versus the dollar in recent trading activity, as markets remained alert for possible Japanese intervention to halt its rally. The Japanese currency is expected to remain wedged in tight ranges for now, with investors unwilling to test Japan’s resolve to keep the yen lower.
US consumer sentiment worsened sharply in early August, falling to the lowest level in more than three decades, after retail sales posted the biggest gain in four months in July.
High unemployment, stagnant wages, gridlock in Congress, and a stock market slump all contributed to a consumer mood that was as grim as when Jimmy Carter was President during the recession of 1980 and interest rates were more than 20 percent.
Despite the gloom US consumers kept spending with retail sales up in July by the most in four months.
CFDs and Spread Trading are financially margined trading formats that carry high levels of risk to your funds and it is possible to incur losses that are in excess of the original amount that you invested. If you are trading via Contracts for Difference and Financial Spread Trading, always invest using capital you can afford to lose. Before making any trades ensure that you fully recognise the risks involved. Please be aware, CFD Trading and Spread Trading may not be suited to all types of investor. Where you feel it is necessary, obtain independent guidance.
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