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4 Jun 2013
Flash: USD weakness mounts though Friday employment provides key – Investec
FXstreet.com (Barcelona) - The overriding theme in currency markets during May was the macro performance of the US economy and the influence this was having on Federal Reserve Officials who were beginning to consider tapering their quantitative easing operations as a viable policy decision.
Yesterday was a snapshot of this theme as investors were left with the conundrum of whether to buy dollars due to further comments from Fed officials in relation to slowing bond purchases or sell the dollar in the wake of a very disappointing ISM Manufacturing figure in the afternoon.
The path of GBP/USD from an opening rate of 1.5200 to briefly test 1.5375 by mid afternoon yesterday tells its own story that the market took the weaker than expected manufacturing numbers as an excuse to exit USD in the absence of any clear short-term direction to the US economy until the US employment figures this Friday, at the earliest. The dollar felt the full wrath of a short market as USD/JPY plummeted back through 100 for the first time in just under a month and EUR/USD strutted above 1.3000. According to Lee McDarby, Corporate Treasury at Investec, “It seems a little premature to assume dollar disillusion will remain before we digest the US employment data which is due for release this Friday.”
Yesterday was a snapshot of this theme as investors were left with the conundrum of whether to buy dollars due to further comments from Fed officials in relation to slowing bond purchases or sell the dollar in the wake of a very disappointing ISM Manufacturing figure in the afternoon.
The path of GBP/USD from an opening rate of 1.5200 to briefly test 1.5375 by mid afternoon yesterday tells its own story that the market took the weaker than expected manufacturing numbers as an excuse to exit USD in the absence of any clear short-term direction to the US economy until the US employment figures this Friday, at the earliest. The dollar felt the full wrath of a short market as USD/JPY plummeted back through 100 for the first time in just under a month and EUR/USD strutted above 1.3000. According to Lee McDarby, Corporate Treasury at Investec, “It seems a little premature to assume dollar disillusion will remain before we digest the US employment data which is due for release this Friday.”