The dollar fell in recent forex trading activity after Federal Reserve Chairman Ben Bernanke stopped short of detailing further action to spur a flagging economy, though further losses could be limited ahead of key US jobs data.
Lately, weak data has fuelled concern the United States is in danger of slipping back into a recession and CFDs investors will look to upcoming data on personal spending, manufacturing and the labour market for clues about the health of the economy.
That should keep spread trading investors cautious about taking on risk and provide some sort of support for the safe-haven dollar. An expected drop in liquidity, due to a bank holiday in London and a hurricane that could affect parts of the US East Coast is also likely to limit risk-taking.
Bernanke, speaking in Jackson Hole, Wyoming in recent trading activity, said the Fed had marked down its outlook for the US economy and that the Fed would extend its September meeting to two days from one to consider its options. However, he also said the onus for boosting long-term growth prospects lay at the feet of the White House and the US Congress.
The Labour Department is due to release August US jobs data. Economists are looking for an increase of 80,000 jobs, with unemployment steady at 9.1 percent.
In recent currency trading activity, the dollar jumped 2 percent versus the swiss franc and the euro gained 2.9 percent. Worries about the US economy and the euro zone debt crisis have boosted demand for the Swiss franc and Japanese yen in the last few months, prompting efforts by authorities in both countries to weaken their currencies.
In US data, new orders for long-lasting US manufactured goods rose in July, offering hope the ailing economy could dodge a second recession even though a gauge of business spending fell. Durable goods orders jumped 4 percent, the Commerce Department said, as demand for autos and airplanes surged, more than erasing June’s 1.3 percent drop. The rise was double economists’ expectations.
Financial Spread Trading and CFDs are geared types of investing which involve high levels of risk. You can incur losses that are greater than your initial stake or investment. Ensure that you only trade with money that you can afford to lose; always ensure you fully understand the risks. Note that Contracts for Difference and Spread Trading might not be suited to all investors. Where appropriate, seek independent advice.