Rumours that the issue of Eurobonds might just feature in today’s discussions between French PM Sarkozy and German Chancellor Merkel also triggered some euro short-covering yesterday. Against high-beta currencies such as the Aussie and the Norwegian krone, the dollar also fell back sharply, with losses of around 1.5% at one stage. Indeed, the Aussie threatened 1.05 in the London afternoon – just a week ago, it had fallen back briefly below parity. Another major currency to benefit from the dollar’s latest wobble was the Swiss franc – early in the day it was close to 0.80, but as the dollar lost ground the Swissie came back strongly and in early London is back under 0.78 again.

Since the big financial crisis erupted in the fall of 2008, there have been many such absurd period. The current summer of 2011, which includes an escalating European debt crisis that approaches the core, an unprecedented downgrade of the US and fears of a global recession, is a time when these abnormal phenomenons happen all the time, the “new normal” if you wish. How does it work?

Guest post by FXPro

In the weekly AUD USD forecasts, I’m always mentioning the important 0.9327 line. This accompanies the Aussie for almost a year. It was finally broken during the New York session:

It’s important to stress that the Non-Farm Payrolls release is the most volatile event in forex trading, and causes very high volatility. I suggest you read my 5 notes for Non-Farm Payrolls trading. The comment regarding the risk factor is very important these days. OK, let’s see what’s special this time:

In a previous post about forex binary options, I’ve shown how a binary option can be used to hedge a breakout of a pair. Towards the upcoming Non-Farm Payrolls due this week, I’ll show how to hedge this event, in any case.

Here’s the Arabic version of this daily forex forecast.

Canada publishes its monthly GDP on Friday at 12:30 GMT. Canada is unique in publishing a monthly GDP, but it’s published late – 2 months after the month ended. Tomorrow’s GDP is for the month of August, in the middle of the third quarter.

By nature, traders, forex or otherwise, can be creatures of habit. That is if we find something that works, we stick with it until it stops working. As it pertains to forex trading, this includes the pairs we trade. Many forex traders get into the game and focus on just one or two of the major pairs. This strategy is acceptable for beginners, but as your acumen increases, it might be a good idea to start looking for other pairs to make some pips. Rookie forex traders often focus on the Euro/US dollar (EUR/USD) and maybe one other major pair like the British pound/dollar (GBP/USD), but if you’re going to trade forex, you should be aware all of the opportunities available to you.

After Britain’s credit downgrade, there were strong fears that this could happen in the US. Today, Moody’s had a good mood for the US dollar. From Reuters: