In the past, a currency market was divided largely by geography and technology. Even the ancient trade markets had barriers in language and transportation. Today we have so many different currencies since over time they evolved naturally into what we see today. Centuries of necessity and barriers that no longer exist; are we ready for a single currency money market? With the advent of the internet, the world is so intrinsically connected that it would be a simple task to get up to date news from the other side of the world instantly. The world truly becomes one big connected playground with the only thing holding us back being a 6-hour sleep period recommended for a healthy life.

Advantages of a Single Currency Market

When considering the trading of single currency in the market, there are always going to be advantages and disadvantages for every global change. One of the advantages of a one world currency market; foreign exchange would no longer be a term since we’d all be citizens of the world. We’d all share the challenges and difficulties with each other rather than profiteering off of weaker countries. The forex currency market would have to evolve into trading different commodities, which in itself is a point that has both pros and cons. With a single world currency, there would be no need to verify or exchange values of currency resulting in much quicker bank and market transfer times. Typically it can take several days for an approved transaction to go through; sometimes this really limits the possibilities of your trading the currency market.

Disadvantages of a Single Currency Market

However, the disadvantages of a single world currency is something far more forex traders actively speak out against. The biggest warning sign is the Euro Zone crisis; if 17 countries cannot operate under a single currency, how would the entire world fair under one. One futurologist suggested we’re more likely to invent and operate communication through telepathy before a single world currency will exist. The highly flexible currency market rates put to death and give birth to many currencies, but it’s unlikely any one world currency will become a reality any time soon if at all. One major problem is that if a single world currency were to fail, there would be nothing else to trade against and monetary value as we know it would collapse.

The Reality

So while a romantic notion, the idea that the world could function and survive on a single world currency is something best left for the science fiction novel. Computer chips in our arms controlling our monetary value and operating a single worldwide currency sounds convenient to the individual, but the truth is the business world requires what’s best for entire companies to aid survival. The currency market simply isn’t ready for one worldwide currency and we’re definitely better off without it; for now.

Eugene Calvini is a writer and an avid forex trader; observing MT4 indicators and armed with a Metatrader 4 demo account he shares his experience and unique insight into the currency markets.

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On Friday, the sterling was high against the struggling euro. The euro for past week it was reported to be 16 month low against dollar however on Friday they said that euro has been at 17 month low.  Later on a day count the sources for the euro zone government informed that the Standard & Poor cut the ratings to low grade.

Warning was made on December regarding the cuts in the rates. This lower of rating has been across several countries and even the Germany was not included in the list. The sterling fell down against pence for about 1% and reached to 82.78 however it was roughly high against single currency (euro).

Noticing the statistical graph between euro and pence, the euro is noted to be at 82.22 pence. It was the lowest noted level since September 2010. Nevertheless the exporters and traders think that the euro zone debt crisis has reached a greenback that is it has finally got a back up. The pound (sterling) is tracked to be low not alone against the euro but also against dollar as well.

At July 2010 the objective barrier was set to be $1.5250 but it was breached to some low at $1.5234 which is 0.7% low. In the retracement of rally in the pound the 61.8% improvement is seen for sterling. The level of demand that is being expected was not achieved but on other side the Italy sold 4.75 billion Euros in the debt. Sterling is the single currency which is at some sentimental risk.

On Thursday the stellar sale the Spanish bonds however the Italian debt auctions also possess some reasonable pressure but not the expected demand. The BOE (Bank of England) will ease the monetary policy a so in the nearer sates the analyst has detected that pound could face some pressures.

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On Friday the euro has rosin against the dollar however few days back it was 5 week low against both the dollar and yen. However, the traders were not aware of its rise anyway. The fear of euro was intensifying before a week and it is not anymore. The investors who had their bet on this single currency “euro” have been unwounded and they have their profits in hands.

The thirst to sell the upticks has been increased with the debt crisis in the euro zone. Pressure is been resting upon the ECB (European Central Bank). Real money investors and other demand on the bond buying programme with the Spanish and Italian however their final close would be unsustainable. Any sort of gain in euro would be fleeting until any relief is been bought as solution to pressure of ECB.

There is much other ways but no one is willing to look in the counter view of the euro and apart from that it would never be an immediate solution to it said a senior currency strategist. In the five week low, euro was at $1.3421 and now after rising it is at $1.3510 which is 0.4% rise. On Thursday it has 0.4% rise and roughly on this week it is just 2% rise.

Retrieving from the last month value of 76.4%, the statistics established as on October 4 it was at $1.3145 and on October 27 it reached a high value of about $1.4248. Now the single currency value is round $1.3405. Forex trade may be swapped out in the euro ranging between the values of $1.355 to $1.3550.

The European Central Bank said on a note that the courageous and active participants would sell the euro for around $1.3550 to $1.3560. They would be shortening euro against the dollar and yen with the value of $1.3650.

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On Friday forex trade rupee was reported to be 37 paise and has hit a one year low and reached about 46.56 against dollar. The fall in rupee is mainly due to the steep fall in the local stock markets and strengthening of dollar values overseas. The weight or burden of the dollar strength has however reflected on the rupee to be down for a while.

Importers have nevertheless demanding long for dollar and thus flow of the capital is slow down and thus the rupee is been neck stuck and lowered for 37 paise. The interbank forex market trade fairly started from a low domestic unit as 46.26 against dollar whereas at its close it was at 46.19 per dollar. As a chain reaction it still lowered to 46.58 and further to 46.56 which is fall for 0.80%.

Brahmbhatt, financial services CEO said that the sustained dollar demand and expectations of the bank committee members of the firm against dollar overseas has an added pressure on the rupee lowering. Local equity markets were weak by 2% which was nearly the weakest level recorded in the year which has depreciated for about 0.75%.

Oil importers demand for dollar and euro has however much favor against rupee didn’t. On the year 2010, dated September 8 rupee was at 46.63 against dollar where it was down for 77 paise because of the local stock markets and 1.68% low. Jean Claud, European central bank president stated that they accept their weakness in the European economy.

He also added that the low growth in euro zone will however, risk the forex market zone. Swiss franc was about the fixed rate of at 1.02 levels against the euro and dollar and thus they have reduced all the safe and alternative phases and strengthened the dollar range across the globe.

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On the Tuesday trade the euro has been dropped against dollar for a record of four month low. The reason the low would the plague at global market and fear that whether the Greece debt crisis would spread all over. The Spain and Italy was the region of target that had more chance in spreading up. In Tokyo trade rate the single currency valid at $1.3958 and they have dropped from $1.4029.

In the New York trade rate on Monday it was around $1.4029 and they reached slowly down and now at the four month low record at $1.3932. Euro was the cause for the value of yen to be lowered. It caused about 0.69 lower in yen. It was previously at 112.51euro and now at 111.82euro. However, dollar increased a little in this conflict. It is now at 80.24 and previously was at 80.11.

Italy and Spain would the next region that had their borrowing cost to soar and that was noticed clearly on Monday trade. In that fear, the euro zone minister had a meeting at Brussels where they discussed about the new rescue package. They had sworn that they would surely see to the enhancing feature of the European financial stability and facility. The fund of about 440 billion euro is lent to euro zone nations.

As in dollars the fund would reach up to $617.1 million. Christine Lagarde, international monetary fund MD said that the Greece had taken efforts to close their budget gaps however it seems to be effect less as they are not sufficient. Dollar strength among other Asian countries is quite strong enough and rising.

Government managing people and the policy makers find that difficult to make decision as the crisis been an obstacle for their development phase. The pressure could at release only when clear and strong agreement is being made with Europe.

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Since Thursday Swiss franc is low against euro. On the forex trade on Thursday the Swiss franc fell against euro and the reports concluded that this state will prevail and the debt crisis for the Greece will be soon resolved. Swiss franc had its all time record of being at 1.1946 however at the Thursday trade close at regarding the New York forex trade, the Swiss franc was at 1.2033 per euro.

Investors has dragged the Swiss to the safe zone of investing over the risk area values but on Thursday the Swiss national bank (SNB) announced about the strength that it is being going through however investors ignored them from accepting, this reason has caused the Swiss franc to be low against euro and dollar.

Regarding dollar, the Swiss franc is currently 0.8499 per dollar. Swiss national bank has taken some advantage over Swiss franc when the value graph shows some kind of inflation and deflation risk in it. SNB (Swiss national bank) has been intervened between the forex and the franc in the periods of March 2009 to the extension of June 2010.

The unbalance and uncertainty of the European peripherals has supported the downside risk between the ranges of euro and Swiss franc. Their support has brought them to high level up to 1.1930 and 1.1850 regarding euro and franc respectively, said by analyst in one of his research note and he is named Marcus Hettinger.

The quarter monetary policy assets have been warned by the Swiss National Bank (SNB) on that Thursday. Nevertheless the Swiss franc was strong enough at its margin level of its Swiss exporters and during this the Swiss national bank also reported that they are planning to sell off the Swiss franc to boost its rise. Euro zone extended emergency loans from finance minister.

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Euro has been at greater heights for eleven months and now it has been slipped back from highs. On the Monday trade the euro value slipped from yen. It was high for five month against the value of dollar. According to the view of analysts, the euro zone higher rates are increasing in the trade market.

On Wednesday, Japan has been planned to publish the economic assets. Tightening the policy in the United States regarding the uncertainty and the view of the working officials on the Federal Reserve said about the downgrading of the economic assets by the bank of Japan.

The central bank of Europe is likely to increase the interest rate by 25 basis points and it marked the value to be low on the trade on Thursday. The euro seemed to be resistance at $1.4281 on the highs of November and however it was relaxed at $1.4230. In the recently marked highs it was raised to $1.4269 against the value of dollar.

Nevertheless of this rise and fall of the euro currency now a day, it’s reached its peak in July 2008, where it was regarded to be at $1.4300. Against the value of yen the euro is now at 0.1 percent low, which is 119.55. It reached 120 last since 2010 in the month of May.

The interest rates and gradual changes can be well noted for the changes at dollar/yen against the common euro rate differences. Dollar is strong enough at the value around 75.786. In the war of yen vs dollar, the dollar was at 84.735 values but on the opening trade it was at 84.04 yen.

Dollar was up for 11% where on the value of yen were 76.25 after the periods of world war.  Aussie had a shift from 87.69 to 87.25 against yen. Aussie against dollar was at $1.0420 to $1.0400.

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Euro is the relatively new currency first introduced by the European Union in 1999.The currency has been adopted by the 16 countries of Europe. They are collectively known as Euro zone.

The EUR/USD is the most widely traded pair in Forex. Both the currencies are powerful currencies. The dynamism and high trading volumes of the two currencies make them very liquid, creating greater opportunities of profit by trading them. Oil is bought and sold in Dollars. Thus heavy trading of dollars takes place through out the world. The euro and dollar are the only currencies, which largely traded.

The movement of the currency pair rests on the following factors:

• Economic performance

The individual economies of both the currencies cast an influence on them. If USA witnesses higher economic prosperity than European Union, the dollar becomes stronger, if vice versa, the Euro strengthens. Interest rates, balance of trade etc are the key indicators governing the rates of the currency. It the interest rates are higher in America, the dollar becomes more expensive against the Euro.

• Political Stability

He recent times have seen lot of political instability among the countries that are the members of European Union. Political conditions are the deciding factors of monetary and financial reforms in the country. There has not been complete peace among the various countries, leading to decreasing rate of euro.

Trading of EUR/USD pair, trade regularly hedge. Hedging is done to minimize the risk. There is a high risk involved due to the high volatility.

The currency pair leaves no room for arbitrage. It is because here are no pricing fluctuations. Any deviations in the market are quickly rectified.

There is less of a difference between bid ask prices. Bid ask spread is low. This lowers the risks of the traders. Therefore the euro dollar currency pair is traded more than the other currencies in the forex.

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Currency exchange is an important aspect of international business. Economic development, trade, tourism, finance and many other important aspects of the world economy are dependant on this.

The main global currency is the U.S. dollar (USD). This means that it is the currency held by governments and organizations around the world to fund international trade and financial transactions. Many global commodities, such as oil and gold are valued by the U.S. dollar.

Currencies can be distinguished as either floating currencies or fixed currencies based on their exchange rate regime. Currency of the European Union, the Euro is rapidly becoming a dominant global currency. A huge percentage of daily trading on the foreign exchange is made up by the Euro and the U.S. dollar. This is according to the Bank for International Settlements, based in Basel, Switzerland.

In the rest of Europe, the British pound (GBP) and the Swiss franc (CHF) are strong currencies that remain outside the Euro zone although the United Kingdom and Switzerland are members of the EU.

A powerful global currency The Japanese yen (JPY) dominates Asian markets and challenges the Euro and the U.S. dollar for world dominance.

For Australia, New Zealand and Canada their currencies are known as dollars and these dollar currencies are commodity-based, which means their value floats with the value of the country’s foreign trade. Nicknames of these currencies are the Aussie, the Kiwi and the Loonie.

Currencies are the emerging economies in South America, Africa and Eastern Europe is most exciting now. There are a number of factors which affect the value of a currency like the political conditions of a country, economic situation, perception from outside, demographics, war and conflicts, weather factors such as drought, famine, tsunami, earthquake, floods and so on and education, natural resources, isolation vs. openness

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The Euro may see near-term gains as Germany’s IFO Survey shows that business confidence in the Euro Zone’s largest economy rose for the third straight month to hit the highest level since May 2008, but sentiment may not be supportive in the longer term.

Key Overnight Developments

• Japanese Trade Surplus Shrinks on Export Weakness
• Australia’s New Home Sales Matched Record Gain in August
• RBA Says Financial System Resilient But Risks Remain

Critical Levels

The Euro consolidated near the 1.47 level in overnight trading, yielding a flat result ahead of the opening bell in Europe. The British Pound advanced, adding as much as 0.3% against the greenback. We continue to hold a short GBPUSD position, initially targeting 1.6112.

Asia Session Highlights

Japan’s Merchandise Trade Balance surplus narrowed to 185.7 billion yen in August as overseas shrank -36% from the previous year, marking the 11th consecutive contraction. Economists had expected a greater decline, calling for a 157 billion result. Export volumes shrank for the first time since May, with shipments to the European Union leading the way lower. The data may be hinting that the $12 trillion or so in fiscal stimulus spent by the world’s governments to stabilize growth that had boosted demand for Japanese products may be running out of steam. Indeed Bank of Japan chief Maasaki Shirakawa expressed concern that his country’s economic rebound may survive once worldwide expansionary policies are reversed. A stronger currency may have also contributed to the outcome: the Yen strengthened by 1.9% in trade-weighted terms in August, the most since January. While this would typically raise fears that formerly activist Japanese policymakers will intervene into the markets to drive down the currency, incoming DPJ Finance Minister Hirohisa Fujii said last week that it was not the government’s job to set exchange rates and that a stronger Yen had its advantages, clearly signaling that Japanese authorities will stand aside from here. The trade balance is expected to continue to contract in the months, with a survey of economists polled by Bloomberg forecasting that net exports will add on average 2.4% to GDP through this year and in 2010, the least since 2001.

Australia’s Housing Industry Association (HIA) reported that New Home Sales surged 11.4% in August, matching the record-setting monthly gain in January 2008. However, property sales began to rebound in May after the government extended a scheme offering an A$21,000 grant for first-time home buyers, so it still remains suspect whether momentum can remain supported after the flow of stimulus cash dries up. Indeed, unemployment continues to climb, with expectations calling for the jobless rate to approach 8% next year, while the HIA’s own Housing Affordability Index fell for the first time in 15 months in the second quarter.

Separately, the RBA’s semi-annual Financial Stability Review was broadly balanced, saying that although the Australian financial system remains resilient and funding conditions for banks have improved, recent progress can owes significantly to government guarantees on lending and loan losses may still rise in the future. The central bank also cautioned that business borrowing has continued to decline (which spells trouble for employment) and the commercial property market has weakened, contributing to the possibility of renewed problems from bad loans ahead.

Euro Session: What to Expect

Germany’s IFO Survey of business confidence is expected to show that the pessimists about the economy’s six-month economic climate outlook among polled firms outnumbered the optimists by the narrowest margin since May last year, with the Expectations index rising to 96.6 in September. A reading above 100 suggests the majority of respondents were optimistic, and vice versa. While the improvement may engineer some short-term gains for the Euro in the aftermath of the announcement, it remains questionable whether sentiment will remain supportive as the effects of fiscal stimulus both in Germany and abroad that has boosted domestic demand and exports in recent months are exhausted. As it stands, a survey of economists conducted by Bloomberg suggests that the Euro Zone’s largest economy will underperform all of the G10 excluding Japan this year and remain behind the US and commodity bloc countries (Canada, Australia, New Zealand) into 2010. This suggests the ECB will be among the laggards as central banks begin to lift interest rates from current lows, an outcome that bodes well for business climate surveys (for surely businesses prefer lower borrowing costs to higher ones) but will likely weigh on the single currency.

Article Source – Euro in Play with German IFO to Show Business Outlook Rose for Third Month (Euro Open)

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Following two relatively peaceful trading days, today is filled with news publications from the major economies. Starting at 06:45 and until 09:00 (GMT) traders are advised to follow the news events from the Euro-Zone. Later on, the Crude Oil Inventories will be published at 14:30 (GMT). This indicator tends to have an instant impact on Crude Oil prices, and traders should use it with their trading. Finally, at 18:15 (GMT), the Federal Reserve will announce the U.S Interest Rates for September. This promises to create hefty volatility in the market, which should provide various opportunities for traders to enlarge profits.

USD – The Dollar Falls before Federal Reserve Meeting

The U.S Dollar’s weakness resumed, as global investors again embraced risks, reducing safe-haven demand for the U.S. currency, as traders took positions on the first day of the Federal Reserve monetary policy meeting. The U.S. Dollar also weakened on speculation that the Group of 20 leaders, meeting in Pittsburgh starting tomorrow, will call for a reduction in global trade imbalances that may cause further gains in the greenback’s counterparts. The greenback traded at $1.4794 per EUR from $1.4790 yesterday, after declining to $1.4842 earlier on, the lowest level since September 22, 2008.

The hard-pressed Dollar had gained some ground Monday as equity markets weakened, with traders tying a decline in risk appetite to caution ahead of the Fed meeting, as well as the summit of Group of 20 leaders at the end of the week. But Tuesday’s resumption of risk appetite may reflect views in the market that neither event is likely to produce meaningful changes analysts said.

Market sentiment toward the USD remains bearish. Analysts expect the Fed to signal its ultra-loose monetary policy will remain in place well into next year. Additionally, as the G20 to discusses rebalancing the global economy this will almost certainly further weaken the Dollar. The Federal Reserve is widely expected to leave Interest Rates unchanged. But markets will seek out clues on the Fed’s asset purchases. Any sign that the Fed intends to continue its quantitative easing measures beyond this year could send the U.S Dollar to record lows.

EUR – Euro Hits $1.48 for the First Time in a Year

The EUR traded at a 1 year high against a sliding Dollar on Wednesday, as traders took advantage of the U.S. currency’s rise the previous day to resume selling ahead of a Federal Reserve monetary policy meeting. The European currency advanced as hopes for a global recovery prompted investors to shift money to higher-yielding currencies from the safe-haven greenback.

In late trading, the EUR was up 0.8% at $1.4796 after options-related demand and strong Asian buying pushed it above $1.48 for the first time since September 2008. European Central Bank (ECB) Governing Council member Axel Weber said on Tuesday recent moves in currency markets were surprising given the Euro-Zone’s economic performance relative to other major economies. Traders expect the $1.4870 level may be the next target in EUR/USD cross, with many predicting an eventual move back to $1.50.

The British Pound also gained against the U.S Dollar for the first time in 4 days, as stocks rallied around the world on evidence that the global economic recovery is accelerating. The British currency advanced 1% to $1.6376. The GBP rose 0.2% against the EUR to 90.33 pence, ending a 6 day losing streak. Against the EUR, the British currency rebounded from near the lowest level in more than 5 months after Goldman Sachs Group Inc. recommended selling the common European currency against Sterling.

JPY – Yen Gains as USD Remains Under Pressure

The Japanese Yen extended its gains on Wednesday vs. the greenback as investors unloaded the U.S. currency ahead of meetings by the Federal Reserve and the G20 leaders this week. The currency gained for a 2nd day against the U.S Dollar on speculation world leaders will discuss policies to rebalance global economic growth at the G20 meeting this week. The JPY climbed to 90.82 Yen per Dollar from 91.10, and rose to 134.40 Yen per EUR from 134.76.

The Japanese currency is likely to strengthen further before new Finance Minister Hirohisa Fujii takes office this month; he said a strong Yen was generally good as it boosted the purchasing power of Japan’s economy. Fujii subsequently backed away from that comment, but speculation will remain that after sweeping to power last month, the Democratic Party of Japan may try to shift the country away from its reliance on exports and its opposition to Yen strength.

Crude Oil – Crude Rebounds as Inventories are Expected to Decline

Crude Oil prices rose Tuesday to above $72 a barrel, as pressure on the Dollar and expectations for a further drop in U.S. Crude inventories boosted market sentiment. Weekly petroleum data is likely to show that stockpiles of Crude fell again last week, as imports remained low analysts said. Last week, the EIA said Crude Oil Inventories decreased by 4.7 million barrels in the week ending Sept. 11, as imports dropped 2.1% from a week ago.

The move in Crude Oil today is likely to be supported by a fresh wave of selling of the U.S. Dollar. Traders will be waiting for U.S. Crude inventory data from the American Petroleum Institute and the U.S. Energy Information Administration. Also of interest to commodities traders is leaders of the world’s most powerful economies will convene in Pittsburgh later this week for the G20 Summit.

Article Source – U.S. Interest Rates on Tap

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There is likely to be less volatility in the market today with almost no market moving data on tap from Japan Europe and Unites States. Yet, few fundamental events that are due out later today may indeed create a remarkable wave in the market, especially towards the late afternoon hours.

USD – USD Ups and Downs Result of Market Uncertainty

The US Dollar experienced an exciting trading day on Monday as a rise in risk averse trading helped add an early morning boost, followed by a retracing of Friday’s levels. Against the EUR, the greenback climbed to as high as 1.4610 before coming back down and closing the day at 1.4717. Versus the British Pound, the USD gained as much as 90 pips, with a high mark of 1.6134, before coming back up and closing out the trading day at the 1.6250 level.

With a decision regarding the Federal Funds Rate looming, traders are becoming more aware of the potential delay in any increase to short-term interest rates due to the instability of global economies recently. Britain has made similar overtures, as did the Euro-Zone in its recent discussions. However, the question still remains over whether the global economy is indeed recovering as many were expecting. This uncertainty drives many investors back into safe-havens for the short-run until things become clearer.

As far as the North-Western Hemisphere is concerned today, the United States is not due to release much data of concern. Canada, on the other hand, is going to release vital data regarding its retail sales levels, which last week caused a stir among the USD and EUR. Growth in Canadian sales may help return the Loonie back to a bullish posture, but forecasts appear modest at best. This Wednesday’s US interest rate decision appears to be this week’s primary event for Dollar traders.

EUR – EUR Benefits from USD and GBP Aversion

The EUR continued its rally against most currencies, save the USD, in yesterday’s trading; making considerable inroads against the GBP especially. Climbing as high as 0.9076 versus the Pound and upwards of 135.48 against the Japanese Yen, the EUR may indeed be one of the primary beneficiaries of market growth, and the continuing uncertainty.

Investors appear ready to make the shift into riskier assets to return to the heady days of pre-2008 growth, but market concerns make their transition move somewhat sheepishly. Regional retail sales in Europe and the US helped give a boost to consumer optimism, but only offset losses in other sectors such as housing and consumer sentiment. With the Pound under heavy selling pressure following statements from Bank of England governor Mervyn King, the EUR, as stated above, has become one of the primary beneficiaries of recent returns to strength and risk appetite.

Going into today’s trading, with little on the economic agenda, the EUR may be poised to benefit from the uncertainty surrounding the US interest rate decisions due on Wednesday. With an announcement similar to those of Britain and Europe recently regarding a delay of an interest rate hike, the EUR could be on the receiving end of further risk appetite and USD-aversion.

JPY – Japanese Bank Holiday Puts Additional Sell Pressure on Yen

The Japanese Yen appears to be returning to a bearish posture against its major currency rivals considering it ended yesterday’s trading down somewhat versus all of its major rivals. Hitting the 149.60 level against the GBP, and even dropping to the 135.50 level against the EUR, the island currency is a little worse for wear considering its latest movements.

Many economists point out, however, that the banks in Japan being closed in celebration of the autumnal equinox carries a significant role in this latest downtrend. The thinly traded JPY only appears weak momentarily until the Japanese markets come back online early Wednesday. In other Asian news, the currencies of the south Pacific (Australia and New Zealand) appear to be gaining heavily against all of their currency rivals. Their avoidance of the harshest aspects of the global downturn has made them juicy targets for risk-hungry investors. Traders would be wise to note the upward movement of these pairs and trade accordingly.

Crude Oil – Crude Falls to $70; Prices Rose too Quickly According to Investors

Investors hoping for a growth in oil prices were dismayed by news yesterday that the price for a barrel of Crude Oil may have risen too quickly from last week’s market optimism. As yesterday helped traders realize, Crude Oil may indeed be over-valued and its recent strength has come to a temporary halt. After last week’s steady yet volatile gains, the beginning of this week has started with a drop of almost $3 a barrel, closing out yesterday’s trading just above $70.

Adding to the sell pressure on Crude Oil is the surprising surge in the value of the USD in yesterday’s early trading hours, albeit offset somewhat by its retraction later in the day. But market optimism seems to have returned, but energy demand concerns persist. Crude Oil has been on the verge of reemerging as a lead investment and inflationary hedge, yet it has failed to receive the same level of support as Gold and Silver, which suggests that demand for oil is low, and precious metals are being used in its stead as a safety valve. Chances are, so long as market uncertainty remains, Crude Oil will continue to float near its current mark.

Article Source – Market Expects Low Volatility Today

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1. Dollar Expects Low Volatility Today
2. GBP Anticipates Volatility before Rate Decision
3. G20 Pledges to Coordinate Stimulus Exit Plans to Limit Market Volatility (Euro Open)