Graphic Rewind: USD Implies that Market Confidence is at EU Summit Levels
USDollar 2hr GMT MarketScope Chart, Created By Adrian Robles
Over the past week the FXCM USDollar Index (ticker: USDollar) climbed to 10,173 points, while market participants lost conviction for the Q2 earning rally seen last week. The subsequent sell off in equity markets around the world prompted Spain and Italy to temporarily ban short selling. On the same day as the short-selling bans, Moody’s changed its outloook for Germany, Netherlands, and Luxembourg to negative. On Wednesday the the US Dollar broke it’s week long up trend, indicating that dispite the poor fundamental developments the market was adopting a risk on attitude. Today US Dollar Index dropped nearly 100 points following the ECB Predisent Mario Draghi’s confidence inspiring speech. Draghi stated, “Within our mandate, the ECB is ready to do what ever it take to preserve the euro, and beileve me, it will be enough.” As a result of the speach the USD fell beyond the levels reached at the end of the EU Summit. Impling that traders are as cofidenent about the EU’s recovery as they were following the anoucments of the resolutions agreed upon at the EU Summit.
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