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The dollar advanced slightly Monday.
Written by article default Monday, 07 June 2010 19:34
Market OverviewThe dollar advanced slightly Monday as last week's flight to safety showed signs of easing after an unexpected jump in German factory orders.
EURUSD ticking down, but remains off the more than 4-year low it hit in Asian trading, as US stocks swing from gain to loss, down about 0.7%. EURUSD at USD1.1927 from USD1.1962 late Fri, as investors remain worried over euro-zone sovereign-debt crisis and possible contagion across the region.
Pressure on the euro briefly eased on Monday after data showed German new manufacturing orders unexpected rose 2.8% in April. Economists had forecast a 0.5% decline.
The dollar index (DXY), which tracks the U.S. unit against a basket of six major currencies, stood at 88.375, up from 88.300 late Friday.
Traders piled into the dollar, the yen and other perceived safe havens on Friday as a smaller-than-expected rise in U.S. nonfarm payrolls raised concerns about the sustainability of the U.S. recovery.
The dollar changed hands at YEN91.88. The euro traded at YEN110.06, little changed from YEN110.00 Friday.
Meanwhile, the British pound rose 0.2% to change hands at USD1.4496.
British Prime Minister David Cameron on Monday laid the groundwork for future budget cuts, warning in a speech that government would have to pay 70 billion pounds (USD101.1 billion) in interest on its debt by 2015 unless it takes action to lower borrowing.
Market expectation
While Hungary doesn't share the euro, the situation underlined concerns about the fragility of the euro-zone banking sector and its exposure to Hungarian debt. More broadly, the developments served to enhance volatility and increase jitters over risk.
Analysts said investors' attitude toward riskier assets including stocks, commodities, and higher-yielding currencies will continue as the dominant theme in currency markets in the near term, maintaining a bias toward a weaker euro.
The USDCAD is breaking down on the hourly chart below CAD1.0590, and it's pointed down to CAD1.0513-CAD1.0505 support. If trades are stopped above CAD1.0590 expect a move up to CAD1.0614. In that case take profit at CAD1.0598.