Will the G-20 summit help the greenback in currency trading?
Right now, the forex trading forecast for the U.S. dollar appears a bit grim. The greenback is slated to head lower in currency trading, thanks to its new popularity as the world’s funding currency of choice for the carry trade.
Additionally, an improving economic picture could mean that the forex trading forecast for the U.S. dollar means long-term weakness as the greenback has become tied to risk appetite.
But in the short term, the dollar may see a rally. GFT’s Boris Schlossberg explains in FX360 how the G-20 summit may help the greenback in currency trading:
This new dynamic makes the dollar even more correlated to risk appetite and the greenback now only rallies when equities decline as was evident on the close of yesterday’s US session. That’s why the upcoming G-20 summit may spark a rally in the beaten down buck as traders steel themselves for possible fresh round of regulation for the financial services sector.
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