Forex Indicates Little Dollar Change, Japan Halts Trading Due to Holiday

Last Monday's news reports that the United States dollar ended up shortchanged in trading compared to some of their many rival currencies, according to Thomson Financial. Because of this, last Friday's gains were consolidated thanks to a slightly hawkish turn when it comes to the expectations regarding the monetary policy of the Federal Reserve. This occurred after a rally took place in the U.S. financial sector as well as several bullish comments that were made by Gary Stern, president of Minneapolis Fed.

There are other hawkish views that one may have expected to see thanks to an expected quarterly loss produced by Citigroup, even though there are some views that have been tested only this week from a US data raft that have June leading indicators.

The Dollar Trend

At last count, the dollar was set at 106.94 compared to the Japanese yen, which is simply a little difference from the 106.95 yen that ended in New York late Friday. The Euro, on the other hand, was said to be at $1.5841 compared to the previous $1.5845. The trading actually came to a halt because there was a public holiday being celebrated in Japan.

A senior foreign exchange analyst by the name of John Noonan, representing Thomson Reuters from IFR Markets implied that if the conditions improve for the United States dollar then the greenback might be able to slowly find its way up and regain some of its former strength. He was quick to mention that there was indeed a slightly dramatic change of mood when it came to the financial market last Tuesday all the way till Friday. The situation on Tuesday was such that there was a bit of impending fear of systemic risk to be experienced in the United States banking and financial sector and such were under very extreme pressure. Because of this, the Fed was seen to be paralyzed and then placed under a lot of pressure on the US dollar.

He also said that by then end of this week the financial waters will have significantly calmed down thanks to the slightly better news that will come from Citigroup – including that of Wells Fargo and also of JP Morgan Chase. There will also be a bit of a hike this coming Friday, when the Fed Fund Futures are going to be placed in a pricing of around seventy six percent in chances of a twenty five basis point hike which will also be experienced by the end of the year 2008. It will probably come as a bit of a surprise but in all actuality, the Euro and the dollar is not really as low as most people seem.