On rare occasions, especially during a slow summer when trading conditions are consistently soporific, market developments appear to make little sense. Yesterday was another example. The euro had a reasonably healthy bid all day, despite the fact that equities were on the defensive, high-beta currencies were back-tracking and commodities such as oil were declining. Both the dollar and yen were slightly offered, on a day when there was a hint of risk aversion. Overnight, Japan’s currency softened after the latest set of BoJ Minutes revealed that some members of the Board felt that further aggressive easing was already justified. Guest post by Forex Broker FxPro Growth figures for the second quarter out of both Germany and France were very slightly better than expected, providing the single currency with some further encouragement. Some of the activity propelling the euro higher on Monday was short-covering; there may well be more to come. As such, we could see the single currency push through 1.24 today. Commentary Dollar indecision. For some time now it has not been easy knowing how to trade the USD. In dollar index terms, the currency is essentially just where it was ten weeks ago and moreover, the trading range over that time has barely been 2%. Notwithstanding the summer hiatus which can produce these very tight ranges and listless trading conditions from time to time, there are some other explanations which account for this moribundity. First, there is less conviction regarding the health of the US economy, despite the most recent payrolls figures. With America facing a debilitating fiscal cliff later in the year unless Washington can get its collective act together, this is a justifiable concern; many American company executives are chagrined by this prospect and it is already a factor in their corporate decision-making. Second, more Fed policy-makers are leaning towards another adrenaline shot of QE. San Francisco Fed President Williams is the latest to add his name to the QE3 register, claiming it is necessary to boost the economy (Williams is a voter on the FOMC this year). Both Boston Fed President Rosengren and Chicago head Evans have made similar demands in recent weeks. Third, the flight from the euro, which was such a feature of forex markets in the first half of this year, has slowed somewhat recently, although this might be simply a function of the summer lull. Once proper volumes return in a few weeks time, the real underlying mood music in forex markets will be audible. Given the intractability of many of Europe’s problems, it would not be surprising if this realisation did not result in further safe-haven demand for the dollar. Danger for lazy Aussie longs. This month’s price action contains some critical warnings for traders. Over the past couple of weeks, the Aussie has repeatedly attempted and failed to get through the 1.06 level sustainably, despite the fact that traders have been adding to their positions. According to the latest CFTC data, Aussie longs are now back to where they were in early May, prior to a huge 9% sell-off over the following five weeks. The Australian currency has lost the upward momentum it enjoyed throughout June and July; it is well above all of the major long-term moving averages (which can act as a magnetic force at times) and the series of favourable local economic data released recently has probably run its course. Also, as we have observed previously, over the past year the 1.06 area has often been a good area to get short the AUD. For lazy Aussie longs, the risks are currently much higher than they were a few weeks back. AIG flees the eurozone. Further evidence of corporate sector euro-abandonment emerged from a quarterly filing by US insurer AIG. An interesting piece in yesterday’s Daily Telegraph claimed that AIG’s holdings in German sovereign debt fell 16% in the first half of the year, and that the company has also significantly reduced its exposure to Italian, Spanish and French bonds. In contrast, UK gilt holdings doubled to nearly USD 3.4bn. Over recent weeks, many major companies in Europe have been increasingly prepared to vocalise their misgivings regarding credit risk in Europe. Last week Shell stated that it was reviewing its credit relationships throughout Europe. This process surely has a lot further to run, and as such could continue to weigh on the single currency. FxPro - Forex Broker FxPro - Forex Broker Forex Broker FxPro is an international Forex Broker. FxPro is an award-winning online broker, offering CFDs on forex, futures, indices, shares, spot metals and energies, serving clients in more than 150 countries worldwide. FxPro offers execution with no-dealing-desk intervention and maintains a client-centric business model that puts customer needs at the forefront of our operations. Our acquisition of leading spot FX aggregator, Quotix, enables us to offer access to a deep pool of liquidity, as well as top-class order-matching and some of the most competitive spreads in the market. FxPro is one of only few brokers offering Negative Balance Protection, ensuring that clients cannot lose more than their overall investment. FxPro UK Limited is authorised and regulated by the Financial Conduct Authority (registration number: 509956). FxPro Financial Services Limited is authorised and regulated by the Cyprus Securities and Exchange Commission (licence number: 078/07) and by the South Africa Financial Services Board (authorisation number 45052). Risk Warning: Trading CFDs involves significant risk of loss. View All Post By FxPro - Forex Broker Other Forex Stuff share Read Next EUR/USD Aug. 14 Limited Gains on Positive German, French Kenny Fisher 10 years On rare occasions, especially during a slow summer when trading conditions are consistently soporific, market developments appear to make little sense. Yesterday was another example. The euro had a reasonably healthy bid all day, despite the fact that equities were on the defensive, high-beta currencies were back-tracking and commodities such as oil were declining. Both the dollar and yen were slightly offered, on a day when there was a hint of risk aversion. Overnight, Japan's currency softened after the latest set of BoJ Minutes revealed that some members of the Board felt that further aggressive easing was already justified. Guest… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.