FX Markets Today

Volatility Never Tasted Better

Depressed consumer confidence in the overall health of the economy helped lean on stock trading yesterday. Fuel and heating costs are affecting the pocketbook of U.S. workers, but the good news is jobs are plentiful and wages are keeping step with living expenses. On the flip side, consumers appear uncertain about increasing energy costs and the possibility of sharp increases in food costs affecting nest eggs and investments. Cheery predictions of an economic rebound from Fed Reserve members is not enough to combat the fact that growth stymied to a .06% pace, and was at a standstill in Q1 for this year.

With global concerns over inflation, the Dollar jumped at the chance to make sharp gains against the Pound and the Euro yesterday. There's an overall sense of impending panic by traders that central banks world wide will try to keep-hold on the reins of control through tightening policy and knee-jerk rate adjustments. Stop hunting was in play for the EUR/USD overnight, as the market broke to the 1.3330's and is sustaining above 1.3350. Support may be hard to find in the Euro, as all the major currencies continue to whip-saw on fundamentals. Comments from U.S. Fed Reserve board member Moskow and more international trade data will surely provide volatility until the close. Technicals favor short positions in the near future.