US Dollar

The week has been an eye opener for market watchers, traders and investors alike. We’re at a crossroads. (Aren’t we always at a crossroad?) Australia is going to elections at the end of November on Saturday 24th. US elections are coming too but that’s next year. Billionaire investor George Soros is warning of an impending market correction. The US dollar is continuing to decline all the while oil and gold is seeing all time highs. There you have it, the five topics that have caught my eye in the past week: George Soros, elections, the US dollar, oil and gold.

Major falls in Commodities overnight Lead to Minor Correction: Overnight in US trade (- yes I just woke up!) the commodities took quite a hit. Aussie dollar is well down and analysts expect the market to open a lot lower than yesterday. Looks like a correction... The analyst being interviewed on the radio said that underlying supply and demand fundamentals for the commodities are still good - China still needs the metals. Anyway, enjoy the new trading opportunities - and for those who had open positions, I hope you had your stop losses!

The US Dollar didn't seem to move much during the public holiday but it did have a large trading range... At 7am (AEDT), the local unit was trading at US75.47¢, which is the same as last nights' close of US75.47¢. In overnight trade, it hit a low of US75.31¢ and a high of US75.78¢. So basically the AUD dollar has been in a trading range of 20 pips above and below...

Looks like the chart is travelling sideways for the moment... Remember it's Martin Luther King Jr. Day in the USA last night so that was a contributing factor.

The United States Federal Reserve has delivered on market expectations by raising its benchmark interest rate by another quarter percentage point to 4.25 per cent and signalling more to come.

However, a change in wording in the statement - the removal of the description of policy being 'accommodative' in favour of 'some further measured policy firming is likely" - was taken as a signal that the end of the cycle is nigh. Bond yields fell slightly in response, the US dollar lost some modest ground and equity markets rallied.