The weak economic data from China earlier this morning has led to the dominant question: When is the right time to buy the greenback?
There is a lot of volatility in the forex market today, as traders just do not have a lot of confidence. This is after Federal Reserve Chairman Ben Bernanke stated yesterday that the Fed may scale back stimulus. This was the news which traders did not expect, and has had a very negative impact on the forex market.
The biggest benefactor has been the dollar, so now traders are thinking when is the right time to buy into the U.S. dollar. With the greenback surging ahead, it may turn out to pay off by purchasing the USD.
The AUD/USD pair is lower today by 0.7% at 93.32 cents. It is important to take into account that the greenback has also made inroads into the euro and the pound in the latest trading.
The above indicates just how strong the dollar is and why you may be interested in opening bullish positions in the U.S. currency. However, it is important to take into account that there is a lot of risk in the currency market. For example, the gains for the USD at the moment may be overdone. As a result, traders will want to employ stops and limits if they are trading with an online forex broker today.
The above shows that it may not be the best idea to buy the greenback when it is overpriced. As a result, follow the dollar on the release of crucial economic data. This will at least help you know when to buy or sell the USD.