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Good day forex trading koalas!
Over the weekend, China had an interest rate hike. This was done so in order to combat inflation and speculative growth.
Looking at the EUR/USD chart above, since the start of the trading week, the EURUSD maintained a bullish momentum. While so, it is now facing resistance and this is not a surprise since the currency pair has been ranging for sometime now.
While the currency pair apparently did not react to the China interest rate hike ( probably due to low volume conditions ) , equities fell and the MSCI World Index lost 0.4 percent as of moments ago.
China is often seen as a major global economic player and any action taken by China to curb speculative growth is often seen as a threat to the global economic recovery by most investors. It is feared that more measures may be taken by the Chinese Central Bank in order to combat the increase of housing and food prices. A fund manager believes the China will be one of the main focus for 2011.
Tomorrow brings us economic data such as the US CB Consumer Confidence and in view of the low volume conditions, please plan your trades well.
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