Forex Currency Trading

Currency Exchange – Forex Mamma

Change in the Forecast for the USD

Over the last few weeks the USD has been on a bullish rise. However, the trend came to a close last week as the Dollar dropped against nearly all of the other major currencies. The Dollar dropped most significantly in comparison to the Euro with the EUR/USD pair rising more than 200 pips to 1.4500.

What caused this change in the USD trend? Last week the downward trend began as the Pending Home Sales published negative figures. It had been expected that the number of homes that awaited closing transactions from November would drop 2.3%. However, the Pending Home Sales figures showed a true drop of 16%, much higher than had originally been projected. As a result, many traders are becoming pessimistic about the economy in the United States despite the recent rise of the USD.

Later in the week the Non-Farm Employment Change features were released. The report showed that the numbers of unemployed farmers in the United States are also on the rise. A previous forecast had stated that only 3,000 farmers have lost their jobs. The report showed, however, that the true number of unemployed is close to 85,000.

This goes to show that it is incredibly important to stay up to date not only on the news but also on economic data that is released by government agencies. Learn to understand how these reports affect the economy and, in turn, the value of currency, is priceless.