Top > Business > 2006 > April > 2006-04-27

Forex Trading Analysts Look for Solution

If you live anywhere outside the US but still have to pay for your rent or car in dollars, having the dollar drop is a great thing. However, if you live in the US or any other country where your currency is actually worth something in the forex trading market, the dropping dollar is not a good thing. In fact, the dollar has officially hit an all time low in the forex trading market, and analysts don`t see an end in sight. The dollar slipped to seven-month lows against the euro on Tuesday after comments from European Central Bank officials left open the possibility that euro zone interest rates could meet or even exceed market expectations.

ECB executive board member Jose Manuel Gonzalez-Paramo left open the possibility on Monday that the pace of policy tightening by the central bank could increase. Earlier on Tuesday, ECB Vice President Lucas Papademos for the first time acknowledged that due to forex trading, interest rates might be increased at least twice more this year. U.S. consumer confidence reached its highest level in four years in April by rising 2.1 points to 109.6 from the revised 107.5 in March. Sales of existing homes rose unexpectedly by 0.3% in March to a seasonally adjusted annual rate of 6.92 million.

The dollar is on its own now ... yields and stocks have gone their own way, and now the dollar will too. The EUR/USD and USD/CHF continue to converge. Monitor these 2 crosses in forex trading as we appraoch 1.2500. Should they crossover, then we can expect the USD`s slide to accelerate, and 1.3000 could again be a possibility for the EUR/USD.