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Risk Appetite Returns But Some Advise Caution

Risk Appetite Returns But Some Advise Caution

Goldman Sachs and US Retail Sales Figures Boost Risk Appetite
On Tuesday a slight return to risk appetite as investors pondered figured from Goldman Sachs and US retail sales figures. Earnings figures from Goldman Sachs and retail sales figures exceeded expectations giving some modest hopes for recovery from the recession. Many traders and forex investors remained wary ahead of Q2 earnings figures from other US financial institutions.

Euro Pressured by German Data
The rise in risk sentiment benefited the Australian dollar while the euro was pressured by German data. According to a poll by German think tank ZEW German economic sentiment fell for the first time in nine months. Greg Salvaggio of Tempus Consulting stated, "Retail sales were better than expected, so that's a bit of good news, but there's been little follow-through as the market is uncertain which way it wants to trade." Many traders noticed that a lot of the 0.6% increase in June retail sales was driven by higher gas prices.

Aussie Dollar Up
The higher yielding Aussie dollar rose 0.8% to $0.7889 boosted by high Australian business confidence.

The pound rose by 0.4% to $1.6297 bolstered by better than expected home price data. The dollar to yen exchange rate rose 0.3% to 93.30 up from 93.15. Better than expected US retail sales data and producer prices put downward pressure on the Yen which has been the chief beneficiary from recent risk aversion.

Some Analysts Say Risk Appetite Not Sustainable
Markets have reacted quickly to any positive data that indicates that recovery is under way. Last week saw increased risk aversion as investors waited for second quarter earnings from US corporations and banks. Forex traders also kept a close watch on the G 8 summit that took place last week. Many currency experts advise caution saying the current are not enough to sustain the current rise in risk appetite.

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Jeffrey Craig Davis has 1 articles online

Jeff Davis is an expert financial writer and specializes in the Forex Market and currency trading. You can find his recent articles at: http://www.forexopportunity.org

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Risk Appetite Returns But Some Advise Caution

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