Forex Traders Looking for Direction

Following Fed Chairman Bernanke’s bullish comments which sent higher risk assets higher and the Dollar lower on Friday, the Forex markets appear to be looking for direction overnight.

While increased demand for higher yielding assets put pressure on the Dollar from March until the first week in August, the recent surge in the equity markets has occurred without too much of a decline in the U.S. Dollar.  This could be a sign that traders are paying more attention to how the central banks will begin to unwind stimulus and quantitative easing plans.  In other words, the central bank that begins to raise rates first will most likely attract the most buying attention to its currency and currently it looks as if the Dollar has the most to gain.

Read full article at ForexHound.com