The dollar continues to appear to be gaining back the momentum it lost last week, as the EURUSD traded below 1.4300 and the USDJPY hit a high of 92.75. However, the real star of the day is the GBP, as it made a mid day u-turn and the GBPUSD is over 200 pips above its lows.
First, a recap of the numbers: (as of 19:00 GMT)
EURUSD : 1.4342 (-7 pips)
GBPUSD : 1.6082 (+184 pips)
AUDUSD : 0.8945 (+8 pips)
USDCAD : 1.0550 (+112 pips)
GOLD : 1093(- $4.20)
CRUDE OIL : 79.40 (+ $0.70)
S&P 500 :1120 (-1.50 points)
What's leading the pound higher?
When it comes to actual news, there isn't anything out there that has been reported that would cause the pound to be moving like it has. Speculation among Forex traders though, is that end of the year trading has led to a large fund or several funds, either covering their short positions or positioning themselves early for the start of 2010. As a result, this buying has triggered additional buying in the pound
Talking about end of the year trading, the AUDUSD appears that it may be the beneficiary of window dressing. Window dressing occurs when financial companies buy outperformers at to make their end of the year holdings appear more impressive. This is a common occurrence with stocks, but could also be happening with the AUDUSD as it has been able to maintain its momentum higher, even as risk appetite for other riskier currencies and gold has waned.
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