Since the opening of the U.S. market the Dollar has declined against most of its currency pairs. This was initiated by the publication of mixed results for U.S. economic indicators. For example positive housing starts and negative PPI data from the U.S. led to uncertainty in the forex market, as these figures showed mixed signs of recovery for the American economy. This also led U.S. stocks to fall for a second day in a row, as banks from Morgan Stanley to Goldman Sachs revealed today that they believe that the U.S. stock market rally has come to an end.
Retail and commodity shares were amongst the main losers today, as uncertainty took its foothold into the stock market. These combined factors led the USD to go bearish throughout Tuesday’s trading. The Dollar is currently trading lower against the GBP by nearly 200 pips at 1.6438. It is also trading lower against EUR and JPY, as traders feel that the U.S. currency is an unstable bet for today.
As the U.S. market comes to a close, the USD may continue to weaken further, as forex traders feel that the USD is a risky bet for today. As a result, fears about the Dollar’s instability has led Oil to rise over 60 cents. If today’s trend continues, then the USD may be in for a bumpy week as a sell-off of the Dollar may hit full-force. If this does occur, then we may see the EUR/USD hit the 1.3950 level by the end of the week.