A Good Week For Investors

Dollar Declines Worst in 24 Years

This week’s rise in risk sentiment has provided investors with increased Forex opportunity. The dollar experienced its worst decline in 24 years as forex brokers expressed concerns about the Fed’s plan to purchase $300 billion in government debt. Forex brokers expressed concerns that the Fed’s action could trigger a round of inflation and undermine the dollar’s value.

Euro Zone Production Declines

The Euro which had provided many with forex opportunities this week fell from a high of $1.37 and was trading at $1.3574 against the dollar. Forex brokers expressed concerns about new data that showed Euro Zone industrial output declined in January. The New Zealand dollar provided many investors with forex opportunities as it rose 6.5% against the dollar.

Dollar Falls 5% Against Major Currencies

The US dollar declined by 5% against other major currencies and may be headed for its biggest weekly loss since 1985. In the past week forex opportunities have been abundant. Besides the rise in the Euro many Latin American currencies provided many Forex opportunities for investors. The Brazilian Real, the Mexican Peso, and the Columbian Peso all rose against the dollar and forex brokers were quick to snap up the forex opportunity offered by these currencies.

Fed Policies Cause Concern

Stocks were up and currency markets reacted taking their cue from equity markets. Reaction to the new Federal Reserve policies caused investors to sell the dollar and seek the forex opportunities offered by higher yielding currencies. Some forex brokers believe the sell off was premature. Adarsh Sinha of Barclays Capital said, “The first reaction after the Fed was to sell everything but as the day moves on we might see some differentiation in what currencies people are buying against the dollar.”

This week has been a good one for forex brokers and investors. Many engaged in forex online trading report increased activity as investors seek forex opportunities. Hopefully this is a trend that will continue.

Jeff Davis is an expert financial writer and specializes in the Forex Market and currency trading. You can find his recent articles at: http://www.forexopportunity.org