Dollar to Extend Recent Gains
According to Bank of Tokyo-Mitsubishi UFJ Ltd currency experts the US dollar may extend recent gains and hit an eight month high against the yen. Analyst Sumino Kamei stated, “In the short-term, the dollar will continue to be in an upward trend.” Kamei made his prediction using a ichimoku chart which predicts a currency’s performance by analyzing historic highs and lows of a particular currency. The chart’s conversion lines charts the sum of the currency’s highest high and lowest lows for the previous nine days. The chart’s baseline is the same calculation for the previous 26 trading days. Fibonacci analysis also predicts a dollar rise. Fibonacci analysis is based on the theory that currency prices rise of decline after hitting a high or low. Using technical analysis traders and analysts study trading patterns and prices to predict changes in stocks, currencies, commodities or indexes.
Greek Concerns Linger
Using recent trading patterns Tokai Tokyo Securities Co. has predicted that the euro ham plummet to a thirteen month low of $1.2457. Yoh Nihei of Tokai Tokyo stated, “The euro may dip below $1.30 and test lower prices,” and also said that an ichimoku chart indicates that “the euro is still in a downtrend.”In Tokyo the euro traded at $1.3581 far short of last year’s high of $1.5144 in November. The euro has been pressures all year by investor concerns about the fiscal health of Greece and other EU nations. Last week’s agreement between the EU and IMF failed to slow the euro’s slide in currency markets. The greenback strengthened after the US Non Farm Payrolls report showed that US employers added about 160,000 new jobs in March. Nick Bennenbroek of Wells Fargo & Co. in New York stated, “A strong jobs report means a stronger dollar against most currencies, including the yen,. The core underlying trend in terms of overall private-sector hiring has probably turned positive in the first quarter of 2010.”
Dollar Gains on Jobs Report
Treasury Secretary Timothy Geithner said that the jobs report showed that the US economy is ‘getting stronger’ and business investment is “coming back” but also said unemployment remains at unacceptable levels. The dollar gained on 13 of the 16 most traded currencies. Marc Chandler of Brown Brothers Harriman & Co stated, “It’s a dollar move. The dollar is cheap because it’s trading below fair-value models. And what does that mean? It means that U.S. labor costs are relatively cheaper compared to Europe, or maybe Japan, or the U.K. or Switzerland.” Trading is likely to be muted over the weekend Easter Holiday.
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