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Paulson's Comments Instill Confidence in Dollar

By:   James Hyerczyk
  • 22-07-2008
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The EUR USD reversed an earlier uptrend to close lower for the day.  The Dollar rose as Treasury Secretary Paulson reiterated his call for a strong Dollar, saying it is "really very important."  Paulson's speech was essentially a call for confidence in the U.S. financial markets.  In his speech Paulson said he was "confident" that law makers will pass a bill to "boost confidence" in Fannie Mae and Freddie Mac.

Comments from Philadelphia Fed President Charles Prosser ignited the second wave of buying for the Dollar when he called for the Fed to "raise rates sooner than later."  Based on recent Fed minutes, he has been known to be hawkish in his commentary.

Also putting pressure on the Euro today was the decrease in crude oil. The energy market took back all of the gain this week when the tropical storm in the Gulf of Mexico shifted its direction away from refineries.

Technically, the trend turned down in EUR USD as the market plunged through the last swing bottom at 1.5783.  The charts indicate 1.5625 is the next downside target.

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Next Analysis: Confidence in U.S. Market Helps Boost USD JPY
Content Provided by:
James Hyerczyk

James A. Hyerczyk is a registered Commodity Trading Advisor with the National Futures Association.

Mr. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor.


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