Ahead of U.S GDP report

Deepening concerns over the global recession prompt risk aversion in the market once more.
It seems we are moving in short cycles of temporary  confidence – where investors join the market trying to take advantage of low prices,  verses short cycles of temporary fear – where investors withdraw their positions fearing things are going to get worse.

The U,S housing and job reports yesterday together with Japan’s industrial output which plunged to record lows, have managed to obliterate any shred of optimism we had left in the market. Now the buying pressure on safe heave currencies persists until the next cycle will come around.

The U.S Gross Domestic Product report is due at 13:30 GMT today. The report is expected to show
a 5.4% decline (the weakest in 26 years). If the numbers will turn out worse than expected we can anticipate buying pressure on the dollar and the Yen to increase.

Z.Georgi

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