Rise in USD buyers, EUR/GBP indicating positive trade opportunity

As we, all know that new year is near and there are prospects of greater trade opportunities in the coming year.

Thus, it’s the right time to have a look at the market recap as if there would not be major twists in these last two days of the year.

Initially USD traded weak in the European session but sudden reverse in the trades returned the buyers of USD back.

The stocks traded more than then the expectation and performed well at the global market and this assisted the currency pairs at risk to overcome from the market ups and down.

The consumer confidence of the December jumped to 52.9 better that the previous report of 49.5. DJIA -1 points and closed at 10545, S&P with -1 points closed at 1126 and NASDAQ with -2 points closed at 2288.

Looking forward, there are reports like December Chicago PMI projecting at 55 against 56.1 of the previous data.

The weekly crude oil inventories forecasted to have -1.7 as compared to -4.9 of previous data.

Due to UK debt and election uncertainty the currency pair of EUR/GBP possibly gain some rise in the trades.

ECB has initiated it’s a slow but sure departure from its alternative course of actions and its 12-month lending program will come to an end in December.

Because of uncertainty, undergoing amid EU economic situation ECB delayed its decision to increase rates.

The risk of sovereign debts in the EU countries is another factor that makes the trades under pressure.

ECB higher officials expect that the EU economy to place a modest and restrained recovery in 2010.

The present downgrade in the sovereign debts in Greece and Spain created tensions among the traders concerning the extension of the debt emergency in the EU.

If the financial problems extends further it would bound the ECB to make the policies strict.

While BOE elected in December to hold interest rate policy and asset purchase program remained as it is.

It is not yet clear that whether BOE is ready for a break in the asset purchase plan to exit out of this.

In the last BOE meeting, it was decided that they would keep the interest rates low at the rate of 0.5% and the level of asset purchase program at £200 billion.

For now, BOE is in the wait, watch situation, and will take time to observe the changes at the Forex trading platform.

The two banks ECB and BOE are having different perspective regarding the policies. BOE will expand the stimulus plans in February and ECB is thinking about the ways of exiting from the stimulus assistance.

These few updates from the Forex trading may bring some changes in the next year trade sessions.