By Dan Eduard – The U.S. Dollar is increasingly being chosen over the Yen as the choice currency during times of heightened risk aversion. The contracting global economy helped to strengthen the Dollar yesterday as the Yen begins to lose favor as a safe haven currency.
As for today, there are several important events coming out of the U.S. and Europe including the U.S Pending Home Sales and British Manufacturing PMI. These events always provide for extreme market volatility in the major currency pairs. Traders may find good opportunities to enter the market following these important announcements.
8:30 GMT: British Manufacturing PMI
• This indicator reflects the level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
• This indicator is very important and is likely to create volatility for GBP pairs.
• The survey is expected to show a slight improvement from last month, boosting hopes that the rate of decline in the British economy is now under control.
14:00 GMT: U.S Pending Home Sales
• This indicator reflects the change in the number of homes under contract to be sold but still awaiting the closing transaction
• The release of the survey typically creates a volatile trading environment.
• A survey with a result greater than the forecasted value of 3.9 could send the EUR/USD below the 1.3150 mark.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.