Wednesday, June 8, 2011

US Dollar is Fundamental Forex Forecast 2011

US Dollar is Fundamental Forex Forecast 2011. US Dollar is Fundamental Forex Forecast 2011 - Euro to USD uptrend remains intact after the jump to 14000th. We are after a few months have shown above, where a large triangle or flat on the way up from the 16000th The results are for a move over 14 940 and test parallel channel resistance comes from several years of decline in motion. It is a goal (100% increase) to 15 279 to reflect than to keep it. Follow the daily short-term technical developments, but it is worth noting that this is used to support the resistance at 14 750 earlier this month can provide. 14515 and 14425 are supported.

Significant moderation of both the Federal Reserve and European Central Bank interest rate expectations has little net effect on the euro / dollar pair, but had hopes Fed bearish crop estimates based firmly in favor of leaving EURUSD gains. A sharp disappointment in May U.S. non-farm payrolls data on hopes that monetary policy from the Fed move by normalizing the near future would be shortened. Overnight index swap, it now appears that the U.S. interest rate expectations are at their lowest level since December 2010 and short-term yields will remain near a record low.

Forex in the World

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On the European side, the ECB interest rates expected to continue at its meeting in July compared to the previous year, consumer price index inflation remains well above the official targets. A crucial question remains, how the ECB in a further tax liability crisis in the euro area, especially Greece. It is legitimate, the risk that the ECB would keep rates as the single currency Union is peripheral bond yields rise sharply. Keep interest rates would almost certainly short-term weakness of the euro across the board and remains a major downside risk for the EURUSD.

Tax debt crises are obviously relevant to themselves. Markets anxiously await resolution of the ongoing EU / IMF / ECB negotiations. No aggressive action against the Greek government would also lose power €.

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The euro remains acutely overvalued against the U.S. dollar, trading 23.5 percent over the PPP-implied real exchange rate. Although this implies a bearish forecast, the couple may push deeper into expensive territory, taking into account the ECB is now the toughest 12-month rate has increased prospects in the majors.

Nevertheless, the specter of public suffering everywhere, and a flare-up of the financial solvency of concern for the common market of the peripheral members may still angry investors hacker attitude (especially the larger Spain and Italy, the rescue would under the existing EFSF rescue funds) the single currency. The impending end of the QE2 has a different driver for the resulting correction is lower than the U.S. provides the Member States are allowed the swelling budget deficit, reflecting the euro's yield advantage shrink, making a correction in the lower EURUSD exchange rate. In the first place, it seems premature to bet on a meaningful reduction in the valuation gap.

What is the purchasing power in Forex Trading ???

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One of the oldest and most fundamental approach to determining the "fair" exchange rate of one currency into another to the concept of purchasing power parity. This approach means that an identical product shall be identical from one country to another costs, with the only difference in price after the exchange rate.

US Dollar is Fundamental Forex 2011
For example, when a pencil will be € 1 in Europe and costs $ 1.20 in the U.S., "fair" EURUSD exchange rate was 1.20. For our purposes, we use the PPP values ​​made annually by Bloomberg. We compare these values ​​with current market rates to determine how much each currency is under-or over-valued against the U.S. dollar.

8 komentar:

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