The forex market is looking looking for stability after last Friday trading which was in a tight range for the first time since Lehman Brothers filing for bankruptcy. The equity market can do the same and has some breath.

The greenback has found strong support recently from the sell off in the equity market which seems mixed after last week volatility amid prolonged expectations of a global recession. The oil and comodities prices has come lower on these same expectaions which refer to a decline
of demand globally.

Last week, The japanese yen came higher across the broad as the declines of the equity market as the first funding currency of the carry trades investing transactions because of  its low cost. The japanese crosses trading was very voltaile attraqcting the forex traders interests as its strong senstivity to the movement in the equity market which has looked recently as a mirror of the current credit crisis which makes all eyes focusing on the Dow movements as a leading indicator to
predict the next movements of all markets.

The gold trading was mixed and volatile recently as the liquidity problems is underpinning the greenback from a side and the risk aversion is giving support to the gold as a reserve from another side amid the current missing trust sentiment but the inflation outlook which is looking down because of the decline of commodities and energy prices or the recession can put weights on the gold which is not making it the best instrument to be bought at this current stance of growth slowing down which came accompanied with a lack of liquidity supporting the greenback.

Best wishes

FX Consultant

Walid Salah El Din

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