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Currencies Update: Dollar resumes its drop
Written by article default Friday, 01 October 2010 03:17
The green currency continued its downside trend on the daily charts against a basket of major currencies after Fed officially, Dudely, mentioned that growth figures has been unsatisfactory which underscored speculations the Fed will add to the current stimulus to boost growth.ISM manufacturing fell to 54.4 in September from 56.3, citing the slowdown in growth in the third quarter, while on the hand the improvement in spending and confidence indices did not give support to the dollar.
The upbeat data gave a lift to high-yielding currencies and stocks, whereas gold climbed to a new high trailing the advance in oil since the dollar's depreciation spurred all dollar-denominated commodities.
The dollar index, which tracks the dollar performance vis-à-vis six major currency, slipped to a low of 78.09, the lowest level in six months, targeting 77.85 where it opened the day at 78.75.
In Europe, the ease in manufacturing's expansion did not weigh on the bullishness in the euro and pound which took advantage of the dollar's weakness.
European manufacturing retreated to 53.7 from the prior 55.1, while UK manufacturing expansion also plunged to 53.4 from the revised reading to 53.7.
In the euro zone unemployment also jumped to 10.1%, the sharpest rise in more than 12 years, but the euro was not affected.
Concerning the euro-dollar pair, it advanced on the daily charts targeting 1.3890 levels as the breach of 1.3500 critical level earlier this week paved the way for the pair to rise.
Now, the pair is trading at 1.3746 after touching a high of 1.3777 and a low of 1.3617, whereas the trading range for today is among the major support at 1.3500 and the major resistance at 1.3850.
Moving to the sterling-dollar pair, it rebounded today on the daily charts following the drop in the prior sessions this week, where it may incline further to 1.5995 levels.
Meanwhile, the pair is trading at 1.5820 after falling to a low of 1.5701 and visiting a high of 1.5871, whereas the trading range for today is among the major support at 1.5660 and the major resistance at 1.5935.
With regard to the dollar-yen pair, it is continuing its downside direction paring most of the rise that took place after the BoJ intervention on September 15 which may raise speculation those Japanese policy makers may intervene again, which may coincide with an upside correction as the pair is currently oversold as depicted by momentum indicators.
So far, the pair is trading at 83.23, recording a high of 83.25 and a low of 83.14, whereas the trading range for today is among the major support at 81.60 and the major resistance at 84.40.