Excerpt from: Forex
|
 |
| January 14, 2009 | | After earlier weakness, the greenback is gaining again in forex trading | Earlier today, the U.S. dollar was showing some weakness in currency trading on the FX market. Now, however, that weakness has largely disappeared -- despite poor retail sales data.
Or maybe because of it.
All the rules seem to be changing. While poor retail sales data is an indicator of problems in the economy, and should normally undercut a currency in forex trading, the opposite effect seems to be happening. The poor retail sales data is showing that the economy is indeed in trouble -- and that the recession may linger -- but the reaction is quite different.
The evidence of poor retail sales is instead stoking risk aversion fears. Traders are making a flight to safety, and in the current environment, that means favoring the currency that is considered most stable. The U.S. economy may be faltering, but it is still seen as the best economy in the world.
| Topic Tags: currency trading, currency trading FX market, dollar currency trading, economy, forex trading, greenback forex trading, recession, retail sales, U.S. dollar | |
|
|
