USD
EUR
Stock Quote Search
Latest News
- Apple, Samsung CEOs set for U.S. court talks
- Euro zone row gets fat pay rise for German workers
- Facebook shares could fall below IPO price: Barron's
- U.S. banking laws unable to stop JPMorgan loss: Republican Boehner
- Insight: China pays high price to spare state firm from bankruptcy
- Barroso: Lenders Stand Firm On Greek Austerity Plan - Wall Street Journal
- US Gasoline Falls to $3.78 a Gallon - Bloomberg
- NY trial of ex-P&G, Goldman board member starts - The Associated Press
- What is a reserve currency, and how do traders use it?
- State unemployment improves to 9.4 percent in April - Jefferson Post
Site Search
British Pound Top Performer in Thin Markets
Created on Tuesday, 27 December 2011 07:55Category: Currencies
Holiday trading conditions remain in place as the calendar turns to the last week of the year. Thin market conditions have yielded little volatility, putting the U.S. Dollar in the middle of the pack, while the British Pound outperformed.
European Session Summary
Trading conditions remained especially thin on
Tuesday, as English speaking countries, mainly Canada and the United Kingdom, celebrated national holidays. Typically, the weeks leading up to and after Christmas are slow, as many trading desks around the world are closed. Higher yielding currencies had underperformed headed into the North American trading session, while the Euro was softer as well.
Notably, the Italian 10-year bond traded back above the 7 percent yield, a rather disconcerting development as it appears banks, at least those active in the market, have taken the European Central Bank’s long-term refinancing operation as an opportunity to pad their balance sheets rather than soak up increasingly toxic sovereign debt. But, given the circumstances, who can blame the banks? New rules require banks to raise capital by June 2012, and instead of trying to raise capital and convince market participants of their solvency, borrowing at 1 percent in unlimited amounts is rather appealing.
The ECB’s LTRO helps liquidity, but like the swap lines the Federal Reserve initiated on November 30, it fails to address the issue of solvency.
Dow Jones FXCM Dollar Index: December 27, 2011
Charts created using Strategy Trader– Prepared by Christopher Vecchio
Overall, the U.S. Dollar is trading slightly lower across the board, with the U.S. Dollar Index (Ticker: Ticker::USDOLLAR) falling slightly in premarket hours. While the Australian Dollar and the Euro were softer against the Greenback, the British Pound, as the best performing currency on the day, sank the index. Later today, with U.S. consumer confidence for December due out, a bump in volatility is expected, though any disruption of the sideways trend is unlikely to occur until next week.
24-Hour Price Action
Key Levels: 14:25 GMT
Thus far, on Tuesday, the Dow Jones FXCM Dollar Index is slightly lower, trading at 9954.10, at the time this report was written, after opening at 9967.87. The index has traded mostly lower, with the high at 9973.67 and the low at 9946.90.
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .
DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.
Courtesy Yahoo Financial News