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Forex Report, October 1 2007 |
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Well, the dollar finally stopped the bleeding today, though it didn't make too much headway against the Euro or the Pound. After hitting another all time high in early Monday trading (1.4281) the EUR/USD currency pair slipped back down to a "modest" 1.4220. Likewise, the GBP/USD creeped up to 2.049 before coming down to 2.038 and finally ranged around the 2.043 range.
The dollar was clearly stronger against the JPY and the CHF today working around 116.00 and 1.17 respectively.
The question remains, however, is this just a weak and temporary pullback for the dollar or the beginning of a reversal? Well, sentiment is still pretty bearish on the dollar and most of the fundamentals support this view. Risk, however, is very pronounced in this high, uncharted territory and investors are wise to be cautious. The dollar fell far and it fell quickly. There is no clear reason to expect this is the end, but it's nearly impossible to maintain that precipitous fall forever. Some type of correction is clearly in the cards.
We'll know more this week, especially on Friday when labor figures come out in the Non-Farm Payroll report. Until then...
Happy Trading!!!
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Forex Report