Members login
Currencies Update: Dollar slides against yen after unexpected rise in jobless claims
Written by article default Thursday, 23 September 2010 20:31
The US dollar slipped versus a the Japanese yen after a US report showing that initial jobless claims rose to 465 thousands last week from 453 thousands a weak before and continuing claims climbed to 4489 thousands from 4537 thousands, above estimates of 450 thousands and 4473 thousands.The downbeat added to concerns that the US economy will have sluggish recovery this year and may need to pump money into markets to boost growth, as announced by the Fed which left the door opened for additional stimulus if needed.
However, the dollar strengthened against a basket of major currencies as depicted by the dollar index which rebounded today to a high of 80.14 from yesterday's closing at 79.76 as worries in markets supported lower-yielding currencies and refuges and damping risky assets such as shares and Canadian dollar which fell against the dollar.
With regard to the dollar-yen pair, it is moving south for the third day on the daily basis after the breach of strong support at 84.80 ahead of the release of US existing home sales and leading indicators reports.
So far, the pair is trading at 84.27, reporting a high of 84.67 and a low of 84.25, whereas the trading range for today is among the key support at 84.00 and the key resistance at 87.00.
Moreover, the European common currency was pulled down against majors after the ease in the manufacturing and services expansion in September and 1.2% in second quarter Irish GDP.
Euro zone manufacturing eased its expansion in September to 53.6 compared with the prior 55.1, whereas services also plunged to 53.6 from the prior 55.9.
On the other hand, the grim Irish growth report underscored concerns that the highly indebted nation in the EU may need a bailout from the EU and IMF.
In addition to this, the German government announced today that it will sell bonds lower than announced previously, causing the spread between Irish and German 10-year bonds to climb to a new record of 411 basis points from 394 points the previous day.
Concerning the euro-dollar pair, it fell after two days of sharp incline, yet it found support at 1.3330 which pulled the pair the upside to 1.3372 after reaching a low of 1.3306.
The trading range for today is among the key support at 1.3200 and the key resistance at 1.3495.
Moving to the sterling-dollar pair, it advanced for the third day on the daily charts in the absence of economic fundamentals from the UK.
Now, the pair is trading at 1.5695 after recording a high of 1.5708 and a low of 1.5609, whereas the trading range for today is among the key support at 84.00 and the key resistance at 87.00.