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Here’s a forex market movement for our times:-

Despite forecasts for a depreciation of the Dollar, many economists are now saying that the negative housing data released from the United States yesterday may actually bolster the USD.

Let’s state the effect in the simplest possible terms.

Bad news for the US economy, lower jobs, lower GDP, leads to lack of confidence
Which leads to a rush towards safe haven currencies…
Which leads to buying USD – because USD is in itself, considered a safe-haven currency…
So bad US news leads to USD going up.

This rush to a safe haven, any safe haven, after every news announcement is creating some weird effects. It flies in the face of logic, well, simple logic anyway – and is a sign of the present dominance of USD

No, I don’t know of any name for this upsidedown, wrong-way-round, echo, reverb effect – but it certainly ought to have a name…
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• Looking at GBP/USD for action today – the head says bearish #
• US stimulus plan – represented as 3m jobs, but a certain vagueness as to where the money finally fetches up…? #

• EUR/GBP definitely looks oversold after this morning, there’s a value bet here, maybe to tp 0.8800 #
• Though CHF might march back against USD quicker than it has – still saying Buy in my (dubious) opinon #
• Been a nice move short on EUR/USD so far today – maybe retrace to 1.2610? Or maybe over as we speak… #

• US CPI 13.30GMT – given up trying to figure price spikes – bad US news, seems to = rush to safe haven and price goes up… #

• Allen (Jay Gatsby) Stanford? Corrupt? That could surely never be… #
• Well, got EUR/GPB totally wrong this morning – only oversold at 0.880, let alone testing 0.90 – what do I know… #
• GBP Inflation higher than expected – they could try checking at Tesco’s – now we’re paying for the depreciating land deals #
• EUR/GBP bullish this morning – trip back to test 0.9000 today as on the 12th Feb? #
• 0930GMT GBP CPI y/y – can’t see inflation being as critical as it usually is… #

• GPD/USD, apart from the odd blip, range-bound today so far, yes, unusual… #
• ITV.L said to be selling Friends Reunited – hindsight being a wonderful thing and all… #
• GBP/USD dropping hard again #

• How wonderful as a UK taxpayer to own half of such a rubbish bank – HBOS #
• GBP/USD seems to have hit resistance again and overbought #
• Forex action in GBP/EUR this morning, down to 0.8940 #

Forex trading the news? – I know this may seem fairly obvious to most, but news events aren’t what they’re talking about on the television financial news networks right now. That’s journalism, reportage, call it what ever you like. As useful information for placing trades in the retail forex market, it’s dead.
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• Poor US news = risk aversion = move out of other currencies = strong US dollar. Something’s illogical here – please explain… someone… #
• FSA kicking off their usual cover-up, with HBOS, cover your backs, boys, that’s it… #
• USD strong across the board, risk aversion again – AUD, CAD definitely struggle #
• Forex GBP/USD on the slide again with London opening, going to test 1.42 area again #