Posted May 07, 2010
In currency trading news for Thursday, all eyes are on the euro and the euro zone debt concerns. However, the Swiss franc managed to overcome some of its declines in recent days.
The Swiss fanc has had a fall that spanned the course of three days, but that stopped today, in trading on Thursday as it started to improve against the US dollar. In fact, the Swiss franc was the best performing of all of the major currencies on the day. However, the euro was still the main focus of trading and to that end, it declined even farther than it had fallen during the week.
The Swiss National Bank focused on the franc during Thursday’s trading session. The faster inflation increases helps the bank to slow the rate at which it intervenes in the foreign exchange market. Many market traders do believe that the Swiss National Bank will allow the franc to appreciate more so in the coming weeks as the growth and inflation numbers for the country continue to improve. In addition, the euro zone money problems could help to turn investors to the franc as a safer option against investments in the euro.
The news regarding the euro was not as good, though. In fact, it continued its fall from earlier in the week. It feel to a new yearly low to US $1.2691 during trading. The drop is said to be because of European policy makers and their concerns that the Greek debt crisis could actually spill over to the other euro zone countries who are operating under a fixed rate system. The euro zone concerns are, in fact, one of the biggest problems for the outlook on a global recovery, some investors said.
Investors are split over what the euro will do. It could begin to show signs of retracement in the coming weeks as the daily RSI falls into the oversold arena. However, speculation is that the European Central Bank will maintain a loose policy throughout the second half of the year, which may cause the euro to continue to fall in the coming days.
Volatile Market Spurs Currency Movement
The stock market plunged nearly 9 percent during trading on Thursday. While this is not directly related to the currency market, it did have an immediate impact. Throughout the course of the day, the Japanese Yen, the Australian dollar and the Swiss Franc moved between four and six percent during the day’s trading. The move was a significant one and while there was a great deal of volleying back and forth, it is evident that there are still incredibly global jitters within the market place.
Many investors are speculating as to what could occur during Friday’s trading. Most expect up to another three percent drop especially with concerns of the Greek’s debt problems. However, some investors believe that if there is stabilization with the euro, this could be a sign that the euro and other currencies are becoming more stabilized.