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Currencies Update: Dollar at 15-year low
Written by article default Wednesday, 06 October 2010 21:21
The world reserve currency fell to trade at 15-year low against the yen after ADP report from the US showed that private employers unexpectedly slashed jobs during last month.The ADP employment report showed that the private sector in the US shed 39 thousand jobs in September, compared with market estimates of 20.0 thousand added jobs. These figures precede the infamous jobs report that will be released Friday with expectations showing that the economy added five thousand jobs only in September, compared with earlier loss of 54 thousand jobs.
Meanwhile, the pound slumped against the euro as investors expect that the BOE will inject more money into markets to sustain and boost growth in the country. The pound is trading near four-month low against the euro ahead of tomorrow’s BOE rate decision that analysts project the bank will preserve at the current level. Moreover, the ECB will release its rate decision which is also projected to remain unchanged with no quantitative measures introduced to markets.
Fitch downgraded Ireland’s rating on cost bank’s bailout plan, which drove the euro to gain against the dollar in today’s trading where the euro-dollar pair is currently near a strong resistance at 1.3890 as its trading at1.3877. The pair opened today’s trading session at 1.3837 setting a high of 1.3883 and a low of 1.3796.
Expectations for the pair is to continue the bullish intraday direction; targeting first the breach of 61.8% Fibonacci correction at 1.3890 to insure the bullish rebound on the short and medium term.
As for the pound performance against the dollar, the royal currency fell to trade at 1.5865, compared with the opening levels of 1.5885, where it managed to reach the highest at 1.5937 and the lowest at 1.5830.
Expectations for more bullish movement today initially targeting 1.6000 and stabilizing above it, noting that breaching 1.5870 will postpone expectations of bullish targets prevailing.
As for the yen, the pair is trading to the downside since this morning ignoring the bullish momentum over four-hour basis, while the bearish channel’s resistance is at 83.30 and is still the ceiling for current trading. This, alongside the negative pressure coming from the 50 MA, maintains expectations of a bearish trend, as long as the daily closing is below 83.30.
The pair is trading at 82.90, compared with the opening levels of 83.23 where it managed to reach the highest at 83.26 and the lowest at 82.71.