Skip to main content

Are You Trading EUR/USD ?

Despite falling last week on the heels of a poor jobs report—United States unemployment rose to 9.6% and nonfarm payrolls did not rise as highly as forecasted—the U.S. dollar began to firm up against both the euro and the yen. Federal Reserve Bank Chairman Ben Bernanke announced in an interview on 60 Minutes that the latest quantitative easing project might go beyond the original $600 billion projection. These factors suggest, then, that even with this short-term gain, the U.S. dollar will continue to weaken, thus creating uncertainty and skittishness on the part of traders as the market finds its way. Long-term positions, then, could be favorable for those trading against the dollar, though this will be a tough bet.

As euro zone finance ministers struggled to protect the euro from the U.S. dollar, Japanese exporters had begun to sell the euro so that they could buy the yen while it remained above 111.000. This happened after the U.S. dollar gained on the yen to reach 82.85 yen over 82.58 yen last week. Likewise, the euro fell on the morning of the 6th of December to 1.3363 U.S. dollars, a slight drop from 1.341 of last week. Only time will tell how these pairs will shift throughout the week, given the upcoming talks regarding Ireland's aid package woes, as well as whether or not the European Union will revamp its budget rules.

So what is the sensible move for early December? Although it's a bit stingy right now, the market could favor the euro after the Irish budget passes and the European Union's aid package goes through for Ireland, though euro investor confidence will slow after that, based on the recent Sentix report that dropped noticeably after a nice rise in November.

This drop in the confidence index could push EUR/USD to a short-term resistance around last Friday's high of 1.3438 or thereabouts, in which case traders might consider selling for a tidy turn around if they can afford it. The recent sharp downturn happened quickly, however, so there's the possibility that corrections might occur in the next few days, so adjust your stop-loss accordingly so you don't get caught out in the open and unprepared.

Those of you following the EUR/USD trends, the job situation in the United States, and Bernanke's quantitative easement plan might consider going on to further do some in-depth research on this matter. Either way, it's definitely an interesting time for the U.S. dollar, the euro, and the yen, which will make for some exciting trading these next few months.

Popular posts from this blog

Historical Sensex Returns Updated - 2024

Historically Sensex has given returns of about 15% per year, despite volatility and price fluctuations of about -20% to +60%. The following table shows S&P BSE Sensex historical data - start  & close values and the yearly returns of the sensex from 2000 to 2024. So far during the year the   index has hit an all-time high of  75,124   and despite markets hitting all time highs not all stocks make all-time highs. There are many stocks still below their highs. Stocks like HDFC Bank, ITC, Asian paints are still well below their highs and some of them have given low returns over last 3-5 years. Individual or Retail investors can achieve consistent returns through investing via mutual funds , whether it be active or passive. Chasing returns from individual stocks is futile. Be a wise investor !

Mutual Funds - How to modify KYC or do rekyc?

Last year SEBI issued a circular effective April 1, 2024 regarding KYC norms for the securities market. This has created a lot of confusion among investors and intermediaries, whether who has to do rekyc and who need not? First check your KYC status from CVL KRA . If the 2nd column says KYC VALIDATED, then you are good to go - no action required. You can invest and redeem all the funds. If it says registered, you can invest in existing Fund houses. You have do rekyc to invest in new fund houses/ schemes. If it is on hold, you have to do rekyc.  You can do rekyc completely online from the AMC's websites, links of which are given below: Bandhan Mutual Fund - Bandhan Canara Robeco Mutual Fund - Canararobeco DSP AMC - Dsp Franklin Templeton Asset Management Franklintempletonindia HDFC Mutual Fund Hdfc ICICI Prudential Mutual Fund Icicipruamc Kotak Mahindra Mutual Fund  Kotak SBI Mutual Fund  Sbi Investors having KYC status of  'Registered' or 'On Hold' can complete thei...