Members login
Currencies Update: Dollar depreciates following FOMC rate decision, BOE Minutes
Written by article default Wednesday, 22 September 2010 20:31
The dollar fell to trade at a six-week low against the euro after the release of FOMC rate decision and BOE’s Minutes, that indirectly noted that the recovery is losing steam while further actions might be presented for financial markets in order to sustain and boost growth in the upcoming period.The Dollar Index, a gauge of the dollar’s performance against majors, fell on the daily basis to trade at 79.76, compared with the opening levels of 80.17, where the index reached the highest at 80.28 and the lowest at 79.73.
The Euro is expected to extend its gains against the dollar, targeting a seven-month high level after technical analysis signaled that the euro-dollar pair has successfully breached 200-moving average level.
Europe’s common currency ascended in today’s trading as it breached the resistance at 1.3340 as its currently trading at 1.3383.
The opening levels were set today at 1.3263, while the highest were set at 1.3394 and the lowest at 1.3246.
Expectations for a bullish intraday direction are highly anticipated; targeting 1.3400 and 1.3460, keeping in mind the importance of stability in trading above 1.3200.
The BoE’s released Minutes failed to affect the cable, but the statement released by the CBI group, which downgraded next year projections for growth in UK to 2.0 percent, from 2.5 percent, while raising this year’s growth projection to 1.6 percent from 1.3 percent.
The pound-dollar pair rose to trade at 1.5679, compared with the opening levels of 1.5618, while setting a high of 1.5714 and a low of 1.5599.
A bullish intraday trend is projected, with starting targets at 1.5800 then 1.5875 that requires stability 1.5725.
Furthermore, the Japanese yen extended its rise against the dollar, where BoJ’s board member Ryuzo Miyao stated that the central bank is monitoring the effects of government intervention in the market.
The initial impact of the intervention depreciated the value of the yen, but over the past few trading days, the yen returned to gain against the dollar.
The USD/JPY pair is depreciating on the daily scale to trade at 84.56, compared with the opening levels of 85.08, where it managed to reach the highest at 85.18 and the lowest at 84.50.
Nonetheless, a bullish intraday direction is projected for the pair with targets at 87.35 where it’s vital for the pair to sustain trading above 84.00 levels to achieve those targets.
As for other currencies, the Swiss Franc advanced as investors sees the currency as a safe have to invest, the Swiss France traded higher against most of its major counterparts.
The USDCHF pair traded lower, extending its decline for the fourth consecutive trading day, reaching 0.9889, compared with the opening levels of 0.9960 while setting a low of 0.9870.