Investors like clarity, traders like volatility and it is traders that have seen their wish fulfilled this week. International news continues to dominate the landscape. The JPY lost ground to the USD in trading late last night and early this morning on the apparent joint invention by the Bank of Japan and G7 members. The currencies saw a volatility rip through the market as international news came from many directions. The USD lost a considerable amount of ground to the EUR on Thursday. The GBP also picked up value against the USD. Gold bounced back up and is trading around 1412.00 USD an ounce as of this writing. The consolidation that the currencies saw when the Japan earthquake happened last week has suddenly turned into a trading frenzy as questions abound and rumors swirl about repatriated JPY via insurance and banking institutions. Also Crude Oil jumped in late trading on Thursday as the United Nations took a stance on the Libya situation.
Trying to read the broad markets must be done in a tranquil manner. Sentiment is changing rapidly depending on news that is coming fast from many corners including Japan, the Middle East, North Africa, the G7 meetings, and various Central Banks. Fundamental economic data has to be taken into the context that risk events are so rampant that it has created a whirlwind for investors. Traders who have the capacity to deal with ranges being tested in the currencies, roller coaster moves in the equity markets, and commodity prices that are fast have certainly seen opportunities. The JPY has traded up and down over 4.0% in value the past thirty hours.
The U.S. released weekly Unemployment Claims on Thursday and they came in only slightly better than expected. Core CPI came in higher than expected, and the Philly Fed Manufacturing Index beat the estimate by a wide margin with a reading of 43.4 compared to the anticipated mark of 29.9. Yet, it is questionable if anyone noticed these results as investors in the States continued to look overseas.
There will be some German inflation numbers today, but as mentioned above the chance that these statistics will make an impact in the market are doubtful at best. The crux of trading is coming with short term insight based on momentary changes in attitude depending on which reports are being heard or read by investors. The Japan nuclear reactor crisis will continue to make news and the impetus from the Middle East is certain to extend into the weekend.
Equity markets responded with some gains on Thursday and thus far the Asian trading sessions this morning have proven positive. Traders will have to pay attention to all developing news and consider the implications with a careful approach. Currency ranges were put to the test yesterday and this is likely to occur again Friday. The dynamic of news events and markets being affected is widespread. Investors who are able to take a careful approach to the proceedings and use a balanced eye may find the chance to participate when others fear to act.
Written by bforex.com
