Forex Weekly Reports Written by Investica Aug 20 07 03:56 GMT After a week of dramatic events and very high volatility, markets will remain in an extremely nervous condition over the forthcoming week. It is possible that volatility levels will decline to some extent, but it will certainly not be the case of ‘business as usual’, especially as liquidity is always lower during August.
The state of global credit conditions, risk aversion and stock market developments will inevitably remain closely entwined with currency market trends during the week. As far as the dollar is concerned, there will be a battle between safe-haven demand and concerns over the US economy.
There is a strong probability that further prominent funds and/or bank losses will be revealed during the week and the market attitude to reports of losses will be an important indicator of market sentiment. Overall, investors will continue to take a more defensive stance during the week even though there will be rapid shifts in sentiment.
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