More on the U.S. Dollar Gains in Forex Trading

227142 Resource 128460 120646 172796 1235575923427 1235683194532 Controlled U.S. Dollar: Strange Tale of Gains on BAD News

Weak economic data sends the dollar higher in forex trading

For the last few months, we have been seeing a rather interesting trend in the U.S. dollar as far as forex trading is concerned: Strength when the economic data is bad. Indeed, Kathy Lien in FX360 points out that <a title="U.S. dollar, Kathy Lien, FX360, forex trading, euro forex trading, dollar forex trading, dollar weakness, dollar strength, Barack Obama" target="_blank" href="http://www.fx360.com/commentary/kathy/719/forex-decoding-the-rally-and-3-reasons-why-it-is-suspicious.aspx?aid=5704">weak economic data is one of the reasons that yesterday's euro rally is a false start</a>. And today she appears to have been justified: Both the <a title="U.S. dollar, Kathy Lien, FX360, forex trading, euro forex trading, dollar forex trading, dollar weakness, dollar strength, Barack Obama" target="_blank" href="http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=88b3fc68-7653-4ba5-bb4e-d17439fbe257">sterling and the euro are giving back gains in forex trading.</a> Which means that we're back to the strange relationship that the U.S. dollar now has with bad economic news. Instead of dropping as the economic data does, the greenback has been gaining. The answer this: Even though the U.S. economy is in trouble, the dollar is still consider one of the most stable and safest currencies in the world. The assumption is that the dollar will provide a "safe" place for forex traders and investors to preserve their capital. It's this safe haven status that is providing strength not seen in the U.S. dollar for years. President<a title="U.S. dollar, Kathy Lien, FX360, forex trading, euro forex trading, dollar forex trading, dollar weakness, dollar strength, Barack Obama" target="_blank" href="http://www.stockmarketfunding.com/SMF-Blogs/Economic-Analysis/February-2009/Summary-of-President-Obama-s-speech.aspx"> Barack Obama's address to Congress</a> yesterday, though stirring and somewhat inspirational, did little to actually inspire the markets. As a result, risk appetite is shrinking again, and the U.S. dollar is finding strength as traders pursue a flight to safety. The interesting conclusion of all of this is yet to come. What happens if the economic stimulus works and the U.S. dollar is no longer needed as a safe haven? And what happens when traders start looking at U.S. economic fundamentals and see <a title="U.S. dollar, Kathy Lien, FX360, forex trading, euro forex trading, dollar forex trading, dollar weakness, dollar strength, Barack Obama" target="_blank" href="http://www.yieldingwealth.com/economic-stimulus-update-how-much-has-been-spent-on-bailouts/">trillions upon trillions of dollars in debt</a>? Dollar strength may be the immediate effects, but dollar weakness may be the long-term end game. 9 application/xml false Barack Obama dollar forex trading dollar strength dollar weakness euro forex trading forex trading FX360 Kathy Lien U.S. dollar More on the U.S. Dollar Gains in Forex Trading Safe haven status puts greenback up against sterling, euro in forex trading http://www.actionforex.com/fundamental-analysis/daily-forex-fundamentals/euro,-pound-give-back-gains-on-weak-growth-data,-u.s.-existing-home-sales-ahead-2009022579930/ U.S. Dollar in Forex Trading News, commentary and real time quotes for currency trading http://www.fx360.com/?aid=5704 Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.9.0.3) Gecko/2008092417 Firefox/3.0.3 127.0.0.1 127.0.0.1 kmcpherson 206.114.34.165 false true false false true 128460 blog blogsite/GFTForex/web