So, we see it again. This morning, stocks have been rising as the Chinese Government highlights plans for an added Economic Stimulus. This helps to inject some confidence into the market. The risk aversion we have being seeing thus abates a little bit. Investors can come out to play.
After analysis, the offshoot of that is that the dollar loses some steam, at least temporarily. The same goes for the Yen. This loss on the Dollar’s part is furthered increased against the Pound as figures in the UK show that Consumer confidence in February rose from it’s lowest levels in four years. Good times…at least for today.
So, in general terms, a lot of investors talk about long or medium term dollar strength; but as soon as there is the slightest sliver of hope that we might be reaching the bottom of this fall, the dollar is pushed back a little bit. Then some other news comes out that shows that we really aren’t quite there yet; then the dollar gains once more, usually further than it’s previous loss.
It’s no wonder Forex traders still keep betting on the Dollar. We will need a steady succession of good news to end this trend. Today might be the day that starts. More likely, it’s just a breather. More likely, the pain will continue. More likely, dollar strength will continue.